As an update from my learnings so far.
ISOs, much like 'wet films' higher ISOs allow for better pics in the dark or for speed. However the higher the number, from what I can gather, the more grainy the picture will appear.
Either keep ISO setting on auto or use high ISO for the correct time and place.
Quality\resolution settings. My camera has settings for;
SQ2 640X480, 1024X768, 1280X960,1600X1200.
SQ1 2048X1536.
TIFF/SHQ/HQ 2560X1920.
As I am after a high resolution, I am on one of the 2560x1920 settings. However the SHQ and TIFF pictures seem to be of a lower quality although bigger files.
From what I have found out, this is because of re-sampling where the computer adds more pixels using electronic guess work. (Interpolation?)
'My' guess work says, stick to HQ.