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As you increase ISO on your camera, you buy yourself a lot of exposure latitude, but you also end up increasing the noise in your image. By going here to my third shooting menu, I have something called High ISO speed Noise Reduction, and by default, it is set to a standard setting, which means that at higher ISOs, the camera is going to digitally try to remove some noise before it writes the image out to the card.
Standard settings are very good, and as you probably already noticed, this camera works great at high ISOs. You probably won't see much of a change in noise up to ISO 400, or even 800. Starting at 1600, you'll start to see a little bit. If you turn this off, though, or turn it to Low, either one, you'll see a little bit more than you're probably used to now. You can also turn the Noise Reduction up to try to get it to eliminate even more noise. You might ask, well, why wouldn't I just keep it on High all the time? The tradeoff with noise reduction is that you'll see softening in your image. So noise reduction works by trying to blur out areas that are noised, so if you turn it up, you are going to end up with less pronounced detail in your image.
I tend to keep mine on Standard; it's probably a rather personal choice. You might want to experiment. Set up some tests in low light, with high ISOs; shoot the same image with each of these settings, and see what you like. Notice that even at lower ISO settings, you're probably going to see less noise in the shadows in your image set to any of these high ISO speed noise reduction settings than you will if you turn it off altogether. It's a very valuable feature. You are probably going to be fine leaving it on Standard, but you may want to experiment with some of the other settings to see how you like them.
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