On the few occasions that folks have asked me for photography help, I've had to explain what "ISO" means and how it works. It's kind of a tricky subject, especially since its meaning in digital photography is a little different than its origins in the world of film. What it comes down to, ultimately, is sensitivity.
ISO, in analog photography, refers to a standard for identifying how well film captures light. The higher the number, the more sensitive. Higher sensitivity comes with a trade-off, however; you get distortion. In film this comes in the form of larger crystalline structures on the resulting negative, or "grain." So pictures taken on film with a high light sensitivity look a little coarse and lose some of the fine detail. To many photographers the grain is only a slight trade-off since it can add depth and character to images. Different film stocks from different manufacturers have varying qualities under particular lighting conditions.
In digital photography, ISO refers to the camera sensor's responsiveness to light. When you crank up the ISO to a higher number you can capture more light. But you still have that trade-off; increasing the ISO on a digital camera creates visual distortion, or "noise." The best digital cameras, in my opinion, degrade gracefully at higher ISO settings. The noise looks less like static on a television and more like, well, film grain. I've seen it on certain Ricoh point-and-shoots, Leica's crazy high-end digitals, and even my iPhone 4 (when converted to black and white).
This graceful degradation reminded me, recently, of another artistic tool where distortion isn't all that bad: guitar amplifiers. A great deal of guitar amplifiers have a knob labeled "gain," and this is directly analogous to a digital camera's ISO setting. That's because it's increasing the equipment's sensitivity to the incoming signal (in this case the electrical sound signal from a guitar). If you turn up the gain too high you overload the amplifier and the sound output starts to break up, creating distortion.
Quite a few musicians enjoy their distortion, of course, but have varying tolerances for how easily it kicks in and how evenly it builds. Amplifiers that allow players to crank up the gain without distorting the sound can fetch a pretty penny. Nikon's D3s and Canon's 1D-MkIV, similarly, don't come cheap, because of their respective abilities to crank up the ISO setting with less noise than other cameras. Some amps, on the other hand, are desired specifically for their distortion characteristics, and famous makers such as Marshall, Fender, and Orange, are sought after because of their signature overdriven tones. Likewise, I might choose Kodak's Tri-X film over Ilford's Delta 400 because I prefer the look of one film's grain structure over another.
So maybe this will clear things up if you play electric guitar, I suppose. Or perhaps it will confuse you further. I just hope this makes ISO a little easier to understand for some folks.
