Originally Posted by Alan
In the context of fixed exposure (i.e. in Manual mode), it's a trade off between noise and highlight clipping.
For example, take a low light scene with these settings:
1/250, f/8, ISO 100 = 7 stops of highlight headroom (very hard to clip highlights), but lots of noise
1/250, f/8, ISO 1600 = 3 stops of highlight headroom (4 stops are clipped compared to ISO 100), but less noise.