SS - Yes the higher the ISO rating the grainier the image. For example I only ever shoot ISO 50 or 100, thats Fuji Velvia 50 and 100 ISO films. The colour saturation on these is awesome and they are the best available for daylight photography.
Only when it starts becoming a very dull day, or even into the early evening would I use anything around 400 ISO. However saying that I have done some awesome evening type shots with long exposure times but these have all been on the end of a tripod for stability.
I would suggest you find a static subject, and then shoot it on all the various settings of the camera, writing down each setting as you go, and then when you download them to your computer have a look at them and see the differences each one has. Also do it on a ****ty day and see what each produces. This way you also get to know your camera and its little idiosyncricies (not sure of spelling
Hope that helps.
Autorotate.