Back in the day when digital cameras weren't around there was film. You would think about what lighting situation you were about to go and shoot in and then make a judgement on what kind of film you would put in your camera.
Film came in different speeds, this was how sensitive to light the film was.
On a sunny day, you would grab 125 or 200 ISO film, if you were shooting indoors (on a sunny day) or if you were shooting outside on an overcast day you would probably use 400 ISO (more sensitive to light).
These days with DSLRs we are lucky. We don't have to shoot a whole roll on the same speed film anymore. We can change the ISO to whatever situation we are in. Yay for technology!
Below we have made a little slideshow of examples of what ISO we would put our cameras on for each of these lighting situations.
Use these as a guide as where to start with your ISO setting, you may need to tweak them for your particular situation. But always make sure you start with the lower end of the ISO scale, as this is what will give you the best quality image.
Just remember, the higher the ISO, the more grain/noise you'll have in your images. Some people may like that look, but for now let's try and get the clearest image possible. Only go to a higher ISO if you can't get any extra light from slowing shutter speed and going down f stops.