That is a very effective way to shoot in sunlight. Remember, shutter speed has effect on ambient light, aperture has effect on light of the flash. In other words, changing the shutter speed will either darken or lighten the ambient light. Keeping the aperture constant will render the same flash light on your subject. Let's say you have a person in some shade standing in front of a bright background. When you take the shot with the correct exposure of the background without using the flash, you will get the perfect background exposure with the person appearing as a silhouette. When using your flash with the aperture at f/11, if you want the background darker, underexpose it, if you want it lighter, overexpose it, in both cases using a change in shutter speed either up or down. Keeping your aperture constant, the light from the flash on your subject will keep the look exactly the same, but the background will be different depending on the shutter speed.
Therefore, suppose the same bright light is on both subject and background. Underexpose the scene by decreasing your shutter speed 2 or 3 stops, but keep the aperture constant. Get the right power on your flash for the correct distance of your subject from the flash, power it down if you are close. Hold the flash out to the side. You will get a nicely side lit subject with a nice dark background! If the subject is close to the background, look for some nice shadows in your image, too, which will give it a nice depth.
Recommended reading: Understanding Flash Photography by Byran Peterson (especially for the above info, pp. 28-31)
PS Cooldude, in your example when you change the ISO you are changing the shutter speed. Let's say the correct exposure at ISO 100 is 2 sec. at f/8. Change the ISO to 800 and the correct exposure is now 1/3 sec. at f/8. If I had left the ISO at 100 and changed the shutter speed from the correct exposure of 2 sec. down to 1/3, I would have a very underexposed subject. So, if you wanted to you could keep the ISO constant and just change the shutter speeds.