This is one of the basics of photography. Before the complex matters come, we deal with the basics.
Read on...
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What Exactly Does ISO Mean?
By
Can San 
The ISO rating was originally a measure of film sensitivity.
Films are rated for a certain ISO, this defines the sensitivity of the film to
light. A film with a lower ISO number needs more light to make the same
image than a film with a higher ISO number.
What does ISO mean in the digital world?
A
digital sensor receives light and converts this to colour information for its
pixels. It performs best when it receives a certain amount of light, let us call this the base ISO of the
camera, for example ISO 100.
The same digital sensor can also work if it receives half the light. So if it operates at ISO 200, the camera will let the sensor have half the light, you can still take pictures, but the colour information coming from the sensor will not be as good. Theoretically there is no limit to how high you can take the ISO on a camera up to, the sensor will still give out image information. However, there are practical limits.
If you let a sensor give out information with less and less light, you are bound to have lower and lower
image quality. What a manufacturer then does is to define the lowest acceptable image quality for the camera in question, and then cap the ISO setting at the matching level.
When the ISO is increased, you can take pictures with less light. But your pictures will not look as good as the pictures taken at low ISO's.
If you are shooting in low light at ISO 100, the shutter speed will usually be so low that it is not possible to get a handheld sharp picture. If on the other hand, if you increase the ISO to 800 or 1600, the resulting image quality will be lower, but you will be able to take a sharp handheld picture.
The ISO setting allows you to trade image quality for low light ability.
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What Exactly Does ISO Mean?
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Image via Wikipedia
I managed to read the book before I returned it to the library, and true enough, as it was mentioned in the preface section, there were a lot of easy-to-understand figures and diagrams on lighting.
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"I most usually shoot at ISO 100, 200 and occasionally ISO 400. It annoys me that there is slight noise when I zoom on the PC. In reality you won't see it"
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"In fully automatic mode my camera does this itself"
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