iSCSI is a transport layer protocol that describes how Small Computer System Interface (SCSI) packets are transferred over a network. It works by transporting data between a server and a storage device.
The difference between iSCSI and NAS is that iSCSI is a data transport protocol where NAS is a common way of connecting storage into a shared user network.
iSCSI is popular in the implementation of SAN systems because of their block level storage structure.
When data arrives at its destination the iSCSI protocol separates the SCSI commands so that the Operating System will see the storage as a local device and allow formatting as usual.
Many people use iSCSI because it uses Ethernet and requires less expensive and complex equipment to operate unlike Fibre Channel.