The lower the ISO, the less sensitive it is to light but also it will yield the least amount of noise. The higher the ISO, the reverse would be true.
If you're taking a pic of a person at night time in a restaurant (for example) and use the lowest ISO setting, you'll get the person's face but not the background (unless you use slow shutter speed, tripod, but that's a whole 'nother issue that we won't deal here). If you use ISO400, you'll get the person's face and some of the background.
You will get higher ISO noise, but you can always clean the noise with an applications such as Noiseware, Noise Ninja etc.
Just try it out tonight at home. Make the background a'la a restaurant, or even take an outdoor pic with lots of city lights in the background. Take a pic with low ISO and then take another one with high ISO, you'll be surprised with the difference.