Once and for all! Explain ISO?

[Izzie]

I've been trucking a camera around for years now. Never taken classes, won a few awards, but starting to finally get my act together to really learn about the trade.

So far I've figured out most of what I need to.

Except ISO.

Had a couple people try and explain it, but always in cryptic jargon that was hard to understand and remember.



So- once and for all! Can someone explain exactly what ISO is (as I understand, it has something to do with light sensitivity?), and how fiddling with it on my camera can help me improve my photography. (for example, I always have my ISO on AUTO, but I have 100-900 or something available)
I have a dinky little (but very trusty!) Canon Powershot SD1100. It dreams at night of being a Canon Rebel.

These are some better examples of my photography, taken with that camera, just...for reference. As always, I'd love to get tips on how I could have done these better!

I've just recently started learning how to adjust curves/levels, which has really helped me get back to the 'real' color of what I photograph.