Large image sensors found on digital single lens reflex (SLR) cameras are able to handle high ISO settings better. The Nikon D70 digital SLR, for example, has a large APS-sized image sensor to handle high ISOs in low-light conditions. The Nikon D70 dSLR image sensor — RGB CCD, 23.7 x 15.6 mm; total pixels: 6.24 million.

Introducing more light, such as by the use of flash or studio lights, can reduce the amount of ISO adjustment needed in a “low light” situation. A tripod is also recommended to reduce camera shake.

Changing the ISO has an effect on the shutter speed and aperture. For example, a higher ISO will result in a faster shutter speed which helps to capture movement.

For the lower end digital cameras, if they offer the ability to manually adjust the ISO settings, they usually offer ratings of 100, 200, and 400. Higher end d-SLRs normally will offer more settings, up to 1600 ISO and 3200 ISO.

As a general guide:

• ISO 100: use on bright sunny days, beach, snow.
• ISO 200: use on overcast / cloudy days; may introduce some visible noise.
• ISO 400: use for indoor photography and night photography (see Taking Photos at Night), or for “stop action” with moving subjects in dimmer conditions such as sporting events; results in higher levels of noise in most standard digital cameras.
• AUTO ISO: use when you want the camera to automatically set the ISO speed as it sees appropriate for the light conditions.

Double the ISO number means doubling its sensitivity to light.

For a little bit of extra information:
http://www.digitalphotopro.com/articles/2006/mayjune/isospeeds.php

“The International Organization for Standardization (ISO) includes national standards bodies from 156 countries. The American National Standards Institute (ANSI) is the U.S. representative. ANSI replaced the American Standards Association (ASA) in the 1970s, for those of you who remember the old ASA speeds.”

Also…
A replica 12233 test chart in PDF format that can be printed and may be able to be used to perform resolution tests on your camera.