ISRC codes are numbers that can be used to identify a particular recording (it's an international standard). This has various uses, one of which is that it is supposed to make it easier for royalty payments to go out to the owner of the sound recording. So, for example, if a radio station plays your work you should get a (tiny) royalty from it, and using an ISRC code makes this process easier (and in some cases the royalty may not happen without the ISRC code).
So it's a good idea to put an ISRC code on every track you release. This is easier than it sounds. Most mastering programs, even the cheap ones, will allow you to easily enter these codes along with the title and the other track info. If someone else masters for you then they will include the codes; you just have to give them the codes.
But where do you get the codes from? In the UK you get them from PPL.
To find out who issues them in another country look here:
PPL stands for 'Phonographic Performance Limited', and they handle performance (not songwriter) royalties in the UK where these involve recorded music (but not live peformances). You need to contact PPL and tell them you want to join and you need some ISRC codes. They will quickly send you out some alphanumerical characters with instructions on how to generate codes from these (for all the criticism they get, they are quick with this).
Basically, you get 3 digits which represent your record label, and that's all you really need. (I say 'digits' but it may include letters). What you do then is you generate from this, for every one of your tracks, a 12 digit code -- see here.
If you're in the UK, the first two digits are 'GB'. (If you're in another country, this will be different). The next three digits are your label's code. The next two are the year of release (so for this year it's '12'). The last five you assign yourself -- the general idea is that you start at 0001 for your first track, and then starting going higher.
So for example, if your were unlucky (or lucky) enough to be assigned the label code XXX, your first track this year would get the code GBXXX1200001. You start again at 00001 next year (so next year your first track will be GBXXX1300001).
Sometimes the ISRC code is written with dashes between the segments, so:
Some software will allow you to include the dashes, it will strip them out itself.
You do need to join PPL to get the ISRC codes and to make use of them, but unlike the other collection agencies this doesn't cost any money.
So it's not that hard to get these codes and to use them. The hardest thing is the process of joining PPL and getting your tracks onto their system, which can involve some hassle. (Their system has been criticized as unreliable; they are currently using a new online system, after a similar attempt to go online last year failed).
Note that you don't have to bother with ISRC codes if you're just releasing for friends and family and to sell a few at gigs and you really can't be faffed with all this and don't want the hassle of joining PPL. For non-established artists the royalties will be zero or peanuts anyway. But if you intend to run a serious record company releasing other people's tracks then this is the sort of thing your acts will expect you to do on their behalf.