ISO is your camera sensitivity to light. In low light you can raise the ISO to get sharper pictures. But beware the higher you raise it, the more noise (grainy) there will be. The goal is to try to keep it as low as possible to allow you to get sharp pics.
in some situations though you are able to get some real nice photo's with relatively little to no noise by bumping up the ISO. It all depends on the situation though.
As is mentioned above, ISO is your camera's sensitivity to light. In the days of film, you the ISO was determined by the roll of film you bought. Higher ISO film was more sensitive to light, allowing you to use faster shutter speeds or smaller apertures and still get properly exposed pictures. With a camera, it's changeable on a picture-to-picture basis, since we aren't limited by rolls of film anymore. But the way it works is similar. Increasing the ISO increases the gain of the light receptors on your camera's sensor (what records the light and translates it). But this increase in gain also results in more noise, or random red/green/blue pixels. So you have to find a balance that gives you the sharpest image. Too low of an ISO setting could result in slower shutter speeds, thus giving you a blurry picture. Too high of an ISO setting could give you a lot of noise. You want to use the lowest ISO setting you can given the amount of light you have to work with. If you are in a really low light situation, it's better to bump up the ISO and to have a noisey, sharp picture as opposed to a blurry, noiseless picture. Likewise, if you are in a setting with ample light, but need a faster shutter speed to capture action, you can bump up the ISO because the camera will compensate by shortening the shutter speed. But if you are in a setting with ample light and no specific needs, it's best to try to shoot at the lowest setting you can in order to keep the noise down. Scott