Yep - that's right. Take the following situation. You have a particular shot you want to get, lets say it is at a rock concert. You've got a lens with a max aperture of f4, and you need a fast exposure so the band aren't all blurred, say 1/125th of a sec. However, it's quite dim in the club and when you take the shot you find it is very underexposed (too dark) as not enough light is getting into the lens at 1/125th.
There are 3 things you can adjust:
1) aperture: but you are as wide open at f4 as possible so you cant get more light in that way
2) shutter speed: you can make the shutter stay open longer and get more light in, but then the figures on stage get all blurred as they move about.
3) "fool" the camera by increasing the sensitivity of the sensor. This is the "ISO" rating. A higher number makes the sensor more sensitive to light. However, higher ISO means more "noise" in the picture i.e. a grainy picture. ISO 100 is usually the lowest and gives least noise. ISO 3200 is very high and will be very noisy.
So, to get your shot, you can keep the aperture at f4, leave the shutter speed at 1/125th, and increase the ISO from "standard" 100 to say 800 to get your shot.
If you have auto-ISO on your camera, it automatically increases the ISO to a setting which will give you the correct exposure for the shutter & aperture settings you've chosen. In this case, your camera will automatically increase ISO to 800.
If you've got a non-auto-ISO camera like mine, you need to remember to put the ISO up manually. And then you forget you've put it up so when you take pics the next day in the sunshine you cant work out why the pics are all grainy

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Hope this makes sense.
Get "Understanding Exposure" by Bryan Peterson and you'll find it is all beautifully explained.
Tobers