Level 1 ISO 9660
This defines names to be the familiar 8+3 convention that MS DOS users have suffered through for many years: eight characters for the name, a period ("full stop" for those of you in the U.K.), followed by three characters for the file type, all in upper case. Many special characters (space, hyphen, tilde, equals, and plus) are forbidden. There's also a file version number, separated from the name by a semicolon, but it's often ignored.
Level 2 ISO-9660
It allows longer filenames and deeper directory structures (32 levels instead of 8), but isn't usable on some systems, e.g. MS DOS.