In digital cameras "digital artifacts" or "noise" is similar to "film grain" on film. The down side of using higher ISO is that higer ISO tends to show "noise". The noise becomes an issue when the picture is enlarged. Digital camers try to overcome this issue of "noise" by applying "noise suppressing" filter, therfore when a ditigal camera detects higer ISO the "noise supressing" filter kicks in. The downside of "noise supressing" filter is that it tends to chip out sharpness out of the picture (to hide the noise) therefore you get rid of the "noise" at the cost of sharpness. Digital SLRs comes with an option to turn on and off the noise suppressing filter. I have no idea if point-n-shoot camers offer this option.