it depends if u want a noisy shot or a blur shot.
for the same exposure and aperture (for most compacts, aperture cannot be set anyway) WITHOUT flash,
a) lower iso means u need slower shuter speed - lower noise at the expense of possible camera shake
b) higher iso means u can have a faster shutter speed, higher noise with possibly much less camera shake.
between having a grainy/noisy image and a blurred image due to shake, i'd rather have the grain/noise.
so conclusion, whack the iso till the cows come home.