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ISO numbers are inversely proportional to the amount of light. A low ISO number is for taking pictures in a lot of light, so you would use ISO 100 (which this camera doesn't have) on a bright sunny day.
The higher numbers, like ISO 1600, are for low light. This camera does a much better job focusing in low light (thanks to an extra little light it fires to help the camera find edges to focus on) than my old digital Minolta did.
The resulting image gets grainy with lower light on the subject, however, just like on film cameras.
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