AUTO ISOAuto ISO takes one aspect of the exposure trio out of the equation and allows you to focus on the more creative settings of aperture and shutter speed. Auto ISO is less automatic than the name may lead you to think it is. Auto ISO settings can be programmed by the photographer to fit a certain criteria. Setting these criteria is a very important step to follow so that Auto ISO functions best.
Not all camera systems have the same feature set, but most current cameras allow you to set a limit on the highest ISO sensitivity setting that can be automatically selected. This is a key feature of Auto ISO. Capping your ISO sensitivity to a setting that you can live with is the most important part of the feature. Each camera is different, and every photographer has different criteria of acceptable noise, so the parameters for settings won't likely be the same for everyone, but most current cameras are good up to at least ISO 1600.
Some camera systems, such as Nikon, allow you to set the minimum shutter speed that the camera will attempt to maintain before increasing the ISO sensitivity. On the newest Nikon cameras, there's an auto setting that allows the camera to adjust the minimum shutter speed setting of the Auto ISO feature according to the reciprocal of the lens focal length rule. You also can adjust this setting to be biased toward faster or slower shutter speeds. Once you enter your preferred parameters, you can almost forget about setting the ISO at all.
Using Auto ISO in Manual exposure mode gives you the best of both worlds. You have 100% control of the creative settings of aperture and shutter speed, while the camera controls the exposure according to the metering mode you choose by adjusting the ISO sensitivity.
Auto settings won't cover the bases for every situation. In controlled environments, or when going for a specific effect, setting the shutter speed, aperture and ISO manually may be the best route to get optimal results.
Different situations call for different settings, and there are definitely situations where using automatic settings are extremely useful. If controlling depth of field isn't an important consideration, Program mode can be an easy option to use when lighting is sufficient to get a fast enough shutter speed to avoid blur from camera shake.
When shooting in a busy environment, where the lighting is constantly changing, such as a wedding or an event, using Auto ISO can be extremely helpful. Setting the parameters to your acceptable levels will allow you to get usable images across the board.
Setting the parameters of your camera's automatic features constrains your camera to your acceptable limits and takes the unpredictability out of the auto settings, freeing you up to focus on the creative side of your photography rather than the technical side.
Check out J. Dennis Thomas' "Nikon Digital Field Guide" at nikondfg.com.