The "ISO 800" (ISO is the "Frenchified" International Organization for Standardization) has to do with an international standard for [link|http://en.wikipedia.org/wiki/Film_speed|film speed].
Basically it has to do with how much light is needed for a good picture. The bigger the number the more sensitive the film is. Using available light is when you might like a higher ISO number. Flash is used to compensate for lack of sensitivity of a given film. There is always a trade-off in these things. Fast film tends to be more "grainy".
The fact that the digital camera doesn't actually use film is mostly beside the point. Similar trade-offs in picture quality come up.