The ISO is the sensitivity of the sensor to the light that is hitting it. There is not much to understand here on this leg of the Exposure Triangle: The higher the number, the more sensitive is the sensor.
The numbers we use for ISO include:
50, 100, 200, 400, 800, 1600, 3200, 6400, …
The ISO scale is linear, that is, 100 is half as sensitive (one stop less sensitive) as 200, which is half as sensitive as 400, etc. The numbers shown here are fairly normal for most cameras; some do not have a “50” setting, and fancier cameras tend to have higher numbers. All cameras also allow you to choose numbers in between these numbers. For example, an ISO of 150 would be 50% more sensitive than ISO 100; ISO 2200 would be 50% more sensitive as ISO 1600; etc.
IMHO, the shutter speed and the ISO are fairly intuitive. Not so much for the last leg of the Exposure Triangle: The aperture!
 ISO stands for the International Organization for Standards: http://en.wikipedia.org/wiki/International_Organization_for_Standardization The acronym was chosen for reasons known only to the international body that made it up. Some say that ISO was chosen because in Greek, iso means equal.