The foundations of correct exposure relies on the combination of 3 things: shutter speed, aperture, and ISO. If you're not familiar with these then you need to google them as they're fundamental to understanding photography.
When you select a higher ISO, the sensor signal is amplified. This means that less light is needed to correctly expose an image. An ISO of 200 needs half the light as ISO 100, ISO 400 needs half the light as ISO 200 and so on...
The positives of a higher ISO are that you can select a higher shutter speed (meaning you're more likely to freeze motion (for sports/action), reduce hand shake (for low light shots or telephoto zoom shots) or can choose a higher f-stop (for increased depth of field).
The negatives are a reduction in the picture quality. A higher ISO increases noise or grain in the image, reduces detail, and can make and image looked muddy.
Gordon's reviews allow you to compare different cameras a different ISO settings. Here's the one for the D7000:
http://www.cameralabs.com/reviews/Nikon_D7000/noise_JPEG.shtml
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http://www.flickr.com/photos/53061745@N02/Panasonic G3: 9-18mm, 14mm, 20mm, 45mm