With ISO you arrange how bright the light that falls on your sensor is registered. You determine how much the signal will be amplified before the analogue signal is turned into a digital signal. In other words, your photograph will become brighter with a higher ISO value and less bright with a lower ISO value.
What is ISO?
ISO stands for International Organization for Standardization. With ISO you can arrange how sensitive your camera is for light. The higher your ISO, the more sensitive your camera is too light.
With analogue camera’s ISO varied from ISO 50 to ISO 1600. Depending on the light conditions you had to choose film roll, and for the next 24 to 36 photo’s you were stuck to this ISO. You couldn’t just go from outside, where there is plenty of light, to indoors, where it is dark. If you would do that, you were stuck with a wrong ISO setting. Luckily with digital camera’s, you can change ISO with every photograph.
ISO and grain
When you use a higher ISO, you will introduce noise or grain in your photograph. You tell your camera to amplify the analogue signal before it gets turned into the digital signal. The light particles hit your sensor somewhat randomly. This leads to a bit of variation in how much particles hit a part of your sensor. When you use a higher ISO, this signal gets amplified, making those variations more visible. This leads to more grain. The grain will be most obvious in low-light situations and in dark areas of the photograph.
ISO and exposure
With ISO you can arrange how bright the light of your sensor is registered (by amplifying the analogue signal before converting it to a digital signal). The higher the ISO, the brighter your photograph will turn out. This means you can either make your shutter speed faster or close down your aperture. Most photographers only make their ISO higher when they are in darker situations in cases where they couldn’t get the shutter speed fast enough for the photograph they are trying to take. For example a wedding in a dark church. Wedding photographers often want to stay flexible so they photograph out of hand.
In order to see what is acceptable to you as a photographer and with your camera, you can make some test shots to see which ISO value is still acceptable to you (and remember, you see more noise in dark area’s than you do in light area’s). Want to know what the noise levels of your camera are compared to other camera’s? You can take a look at http://www.dpreview.com/ to see how your camera does when you compare it to other brands and models.
The photograph with a lot of noise looks a lot messier. With portrait photographs, it often does not have the preference to photograph with such a high ISO. But there might be situations thinkable where you might want to have a higher ISO to get a certain look and feel to your photograph. But for me personally, I only use a higher ISO when I cannot change the other settings anymore. When the situation is very dark.
Higher ISO or brighten during post-processing?
This, of course, is a very interesting question. Is it better to shoot with a high(er) ISO or to keep your ISO as low as possible and brighten the photograph in post-processing in programs like Lightroom or photoshop?
The answer is that it is better to get the picture well exposed out of your camera and therefore you end up with less noise if you use a higher ISO instead of brightening the photograph during post-processing.
There are two different kinds of noise. Shot noise and read noise. Shot noise occurs because the light particles hit your sensor at random places, giving a variation in how many light particles hit each part of the sensor. Read noise occurs when the analogue signal from your sensor is transferred to a digital sensor by your ADC (analogue to digital converter). The ISO setting on your camera amplifies the analogue signal before it is digitized. The shot-noise gets amplified too, but the read noise does not get amplified too. However, if you brighten the photograph in post processing, you are amplifying both kinds of noises. This results in more noise.
So try to properly expose your photograph out of your camera, this will let you end up with the best results.