Let's start with ISO, or also known as film speed. ISO determines how quickly an image will be captured by the camera's sensor. The higher the number, the quicker an image is captured and the less light you'll need. The lower, the longer and the more light you'll need. You should observe the lighting around you when setting your ISO. If its nice and bright, you can go with a lower setting say around 100-200. If you have decent lighting but maybe somewhat of an overcast feeling you may need to bump it up to 400. If you're in a darker environment, I would suggest 800-1600. NOTE: Once you go above 800, you'll start to get something known as "noise" in your image and the sharpness of your photo will rapidly decline the higher you go.
Now onto shutter speed (SS). SS is how quickly the shutter operates. It can range from several seconds to 1/4000 of a second. I personally find SS to be an easier concept to grasp. A fast shutter speed will freeze action where a slower one can create a blurred effect. Fast moving objects (sport games, splashing water, etc.) will need a faster SS. The lowest SS that I prefer using (if I'm hand-holding the camera) is 1/60 of a second and even that is fairly low. I typically increase that to above 1/100 when shooting our very active toddler :-) This is because the slower the SS, the more of a chance my photo will come out blurry.... and I hate when that happens!!
I posted an example to help illustrate these concepts. This is our kitchen faucet and I tried to show you how the camera captures the water splatter at different shutter speeds:
SS: 1/80 - ISO: 800 (Slow shutter speed. You can see the movement (blur) in the water still.)
SS: 1/800 - ISO: 800 (Much faster. Look at the water dropping from the candle stick. It's much more defined than the one above but you still have a sense of movement in the water as it is falling.)
SS: 1/2000 - ISO: 1600 (Even faster! I want to reach out and grab those drops! There's barely any movement. Each drop is really defined.)