In Photography, the sensitiveness of the sensor to light is known as ISO. Understanding ISO settings in Digital photography is very important. In order to understand this better think of walking from a bright lighted room straight into a room with hardly any light at all, or a dark room. Once you walk in, your eyes won’t be able to see a thing. Give it a few minutes and your eyes will adjust to the darkness and you will start to see your surroundings. Your eyes automatically compensate for the lack of light by increasing the sensitivity (ISO) of retina (sensor) or increasing the diameter of Irish (aperture). Camera does the same thing with ISO with the help of Aperture & Shutter Speed to achieve correct Exposure.
In the days of film cameras users would load films of different speeds (ISO) depending on the lighting condition in which they would be shooting pictures. If they would be shooting in low light conditions, they would load the camera with a high ISO film and vice versa. When digital cameras replaced the film cameras of yesteryears, the concept of ISO remained the same but the films were replaced with electronic sensors. Still today, camera manufacturers refer to the sensitivity of the sensor with the term ISO. If you check the specifications of a DSLR for example, you would find details such as ISO 100 – 6400. What it means is basically that the sensor is able to shoot images in a range of 100 – 6400. It can range from 25 to 256000. Higher the ISO number, higher the sensitivity. Usually ISO 50-400 is considered low ISO. ISO 800 and up are considered high ISO. They both have their advantages & disadvantages.
High ISO lets you take photographs at locations where there is a lack of light & higher shutter speed is required to freeze the action. For example in indoor sport or wedding ceremony where even widest aperture is not enough to provide sufficient light for a shutter speed to freeze the action. In that situations, camera compensates for the lack of light by increasing the ISO. Now, in low light situations, you could use a flash, but if you don’t have one or you don’t like the effect of artificial light or in certain places where Flash are prohibited you can move to a higher ISO.
You should remember that although a higher ISO setting will let you get a correct exposure even with a poor light source, you will also get more digital noise. Digital noise is the small squares that you can sometimes see on photographs. Usually cameras (both DSLR and Point & Shoot) face an issue of noise when shooting pictures at high ISO levels. This happens because the filter array of red, blue and green are unable to properly identify the correct colors in the light waves and thus dark spots appear on the final picture. With a low ISO setting, you will hardly or not even see those squares, but with a high ISO setting, those squares are visible. Fortunately modern DSLR like High end Canon 1DX, 5D mark III or Nikon D4, D600 can handle noise very well and capable to produce clean images even at 3200 ISO.
On the other hand the lower ISO setting is generally used when there is lot of light around the subject or the subject is well illuminated or most importantly when more details with less noise is required. For example portrait & landscape photography the ISO setting is deliberately reduced to something 100 or less to produce more details.
However, a low ISO setting is also a cause for camera shake if you are holding the camera. It is not because of lower ISO, but usually for longer shutter speed. Because in low ISO setting sensor needs more time (longer shutter speed) to absorb light. With a slow shutter speed, the subject can move or your camera can move while the shot is being taken and you will end up with a blurred photo. Now you have few options, use image stabilization (vibration reduction) or use external light source (Flash) or a Tripod.
You will need a bit of practice when using ISO. Take several photographs of the same subject, under the same light conditions, with different ISO settings. Keep a note of the sequence of ISO settings you used so when you view your photographs on a large screen, you can identify how these different ISO settings affected your photograph.