Outside ISO gets the ball to your backcourt player that has the best ability to score. It has no focus inside or outside per se, just how the ISO player scores best. Usually, the defender of a guard has low inside defense, so if you can get the ball to a guard with high Inside shot, he will have a good iso matchup. Vice versa for inside iso.
Because the iso player needs to create offense, he'll need good driving, handling, passing and of course scoring in some way. This goes for both iso's, and the best way to score is usually the way your opponent's defense is worst.