ISO is the measurement of how sensitive a digital camera's sensor is to light. The speed or light-sensitivity of a digital camera's sensor is rated in ISO numbers -- the lower the number, the slower the response to light.
Higher ISO numbers indicate a higher sensitivity to light, so less time is needed to expose a picture. Most digital cameras let you control the ISO setting to allow the use of higher shutter speeds and/or smaller apertures, according to circumstances.
Many digital cameras offer high ISO settings (e.g. 1600, 2000, 3200, even up to 6400!) While this allows photos to be taken in low light, you will generally find that the higher the ISO setting, the noisier your image will -- depending on how much noise there is, it might look like your photo is covered in a layer of sand (that would mean a lot of noise).
Unless you really need to use an ISO of 1600 or more to capture your subject, I'd stick to the lower end of the spectrum -- hesitant to go higher than ISO 800.