The letters ISO on your digital camera settings refer to the film speed. Even though your camera is most likely not film at all, but rather digital, the ISO setting still does has the same function as older film cameras. ISO determines how sensitive the image sensor is to light. If your after more technical information, Wikipedia has a good article on ISO speed. The most common ISO speed settings are: 100, 200, 400 and 800.
ISO Tips:
Use an ISO of 100 or 200 when taking photographs outside in sunny conditions.
If the sky is overcast or it is evening time, then use an ISO within the range of 400 to 800.
Night time or in cases of low