Noise and Exposure
Noise, that annoying sand-like texture in a digital photo, has been seriously attacked by all major camera manufacturers. It is unwelcome in most photography, but especially nature photography. You can actually get away with more noise in certain types of photography because viewers accept it there, such as low-light photography of people and news. And some photography, such as travel and fashion, will use noise in creative ways. But most photography needs “cleaner” images, meaning less noise.
Most cameras today have better sensors and noise-reduction algorithms built into cameras to keep noise low even at high ISO settings. With some of the newest cameras from Nikon and Canon using full-35mm-frame sensors, noise levels are extremely low, even at high ISO settings (low noise at high ISO is a good reason for a full-35mm-frame sensor). In addition, programs like Nik Software Dfine do a terrific job in reducing noise (it makes my smaller sensor Olympus E-3 perform much better at higher ISOs for example).
But one thing you don’t hear too much about is how exposure is still a limiting factor. In fact, exposure becomes more critical with higher ISO settings. Higher ISO settings are not changing the sensor — they amplify the signal coming from the sensor. Manufacturers start applying noise reduction right on the sensor itself, then to the signal being amplified and more to keep noise down. However, as you amplify any signal, noise increases. What happens, in a sense, is that noise is just waiting to be revealed.
So if you underexpose a high-ISO exposure, you are likely to make that noise visible. The more the underexposure, the more likely noise will be noticed. You have more latitude with exposure with low ISO settings because the noise is less to begin with and not so close to the final image.
This also shows up when shadows from high ISO shots are processed. Shadows are essentially “underexposed” compared to the rest of the scene, making them closer to the noise, as dark areas will always hold more noise than brighter areas. That’s not a problem as long as those shadows stay dark. But as soon as they are brightened in Lightroom, Photoshop, etc., noise will quickly become obvious no matter what camera you use. You have less flexibility in processing an image when it is shot with a high ISO.
The solution to all of this is, first, be sure you expose correctly for a scene without underexposing key tonalities in that scene. Second, if you need to get the most out of an image, from shadows to highlights, expose properly and use a lower ISO. You will start hearing people say that you can shoot all the time at higher ISO settings. That can be a benefit for some photography, but remember, that as the ISO goes up, the exposure latitude goes down and the ability to get clean, noise free shadows also goes down.

