What does the ISO setting really do on my camera?

Iso relates to old fasion film and has been translated for digital it tells you how sensitive the "film" or in the case of digital the sensor is recording the image. The higher the iso the more sensitive it is to light high isos are good for action but the sensitivity will cause grain. For low light you want lower iso but the reduced sensitivity means the shutter will stay open longer so a tripod is best for low light. You can use higher isos for low light but it may become slightly grainy so you want to choose an iso in the middle. Now for the summary iso of around 100 are pretty much for very bright light areas and for low light with a tripod its used to avoid grain but can be difficult to use with any shaking. Picking an iso is trying to balance the need for grain free picture with the need for motion blur free picture. Think about it this way if you are taking pictures through a telescope you would need a long exposure and a high iso would be too sensitive causing alot of grain but a low iso is good for that pic because the camera would be very still. Isos of 200 are good general picture taking without much action for action shots I use 400 actually I use 400 for most things because I shoot wildlife and I am too lazy to change it for most other work and it works just fine for me over 400 is good for shots where you need a very high shutter speed like trying to stop the blur of a helicopter but unless you change the shutter speed you are likely to get a grainy pic. For low light hand held you may want to stick with the 400 but for tripod low light you can go lower isos in the end its really up to your preference.

The higher the ISO level the more senstive the sensor is but the more noise that will be brought onto your pictures. Digital cameras handle ISO better than others, for instance, a SLR vs a compact point and shoot camera. The SLR handles ISO better than Point and Shoot cameras allowing a shooter to use high ISO levels with little noise. Most compact cameras can not go above 400ISO without becoming so unsuable even though they have the capablitiy to go to ISO 800. The higher you go on the ISO levels, the faster the shutter speed can go (usually one whole stop), you will be sacfiicing imagine quality for shutter speed which reduces the chance of camera shake and subject blurr. For question 3, just depends on what your doing. If its scenic, the lowest possible ISO is the ideal setting for the best quality picture and use a tripod, not a cheap tripod like the $40 ones at Best Buy but like a Bogen $100+ tripod. However if its a wedding and a dark room using high ISO sparingly is a great advantage not to have subject blurr. Your default setting for your camera should be 100ISO but change it as need be.

All the answers above give an excellent explanation of ISO in terms of film cameras. For digital cameras, ISO is similar to film ISO, but not identical. Essentially, a digital camera counts how many photons hit a picture element on the sensor, to a certain maximum. The sensors on most digital cameras count up to about 16,000 photons before that element of the sensor becomes saturated. That's at the lowest ISO setting, which is usually ISO 100. At ISO 200, it counts max 8,000; at 400, it counts 4,000, and so on. The camera adjusts the illumination of the picture overall in accordance to the ISO setting. In film cameras, the trade-off of high ISO is grainy pictures because the film emulsion is coarser. In digital cameras, high ISO pictures appear noisier because there's less range from darkest to brightest points on the picture, and you're taking a lower sampling of photons. Therefore, while using a higher ISO setting will negate the effects of hand-shake, it will diminish the quality of the picture.

I always use 100 UNLESS I've got a pressing reason not to. You'll get the best quality pics at ISO 100. To reduce camera shake, if you handhold (which you probably do) go to a higher number. But stay with the lowest possible number that gives you a blur-free image. I agree with OMG that for the best night time images you should use ISO 100 with a tripod. But really, only you can determine what is acceptable quality in your pics. You may be completely happy with night shots taken at ISO 800 or 1600 handheld. And if you're happy with them, that's what counts!

large ISO will result to more dotted in your pix. small ISO will result fine pix. use tri-pod when using small ISO.