ISO speed is a number that indicates the sensitivity of the film or the imaging sensor to to the light. ISO sensitivity is measured by a set of standards established by the International Standards Organization (ISO). In general, films with a higher sensitivity (larger ISO number) have coarser grain and do not register detail as well as films with lower sensitivity (lower ISO number). With digital sensors, in general the larger ISO number will cause more noise in the sensor and will degrade the resulting picture to some extent, however there are some software application packages which can filter out the noise from the digital file.
The number series for ISO film speed is:
25, 50, 100, 200, 400, 800, 1600, 3200, 6400,12800
Moving to the right in the above table, each number is twice the preceding number, and represents twice the sensitivity to light as the previous number. There can be some intermediate steps (such as 64 or 125) on the camera dial which represent fractions of the above number series.
Lower ISO is more suited when you require higher image quality with less grain or noise in the image. Higher ISO is more suited when you require higher speed to capture moving subjects or when shooting in dull light.