Internal set theory
From Academic Kids

Internal set theory (IST) is a mathematical theory of sets developed by Edward Nelson which provides an axiomatic basis for a portion of the nonstandard analysis introduced by Abraham Robinson. Instead of adding new elements to the real numbers the axioms introduce a new term  'standard'  which can be used to make discriminations not possible under the conventional axioms for sets. In particular, nonstandard elements within the set of Real numbers can be shown to have properties that correspond to the properties of infinitesimal and illimited elements.
Nelson's formulation is made more accessible for the laymathematician by leaving out many of the complexities of metamathematical logic that were initially required to rigorously justify the consistency of infinitesimal elements.
Contents 

Intuitive justification
Whilst IST has a perfectly formal axiomatic scheme, described below, an intuitive justification of the meaning of the term 'standard' is desirable. This is not part of the official theory, but is a pedagogical device that might assist the student engage with the formalism. The essential distinction, similar to the concept of definable numbers, contrasts the finiteness of the domain of concepts that we can specify and discuss with the unbounded infinity of the set of numbers.
 The number of symbols we write with is finite.
 The number of mathematical symbols on any given page is finite.
 The number of pages of mathematics a single mathematician can produce in a lifetime is finite.
 Any workable mathematical definition is necessarily finite.
 There are only a finite number of distinct objects a mathematician can define in a lifetime.
 There will only be a finite number of mathematicians in the course of our (presumably finite) civilisation.
 Hence there is only a finite set of whole numbers our civilisation can discuss in its allotted timespan.
 What that limit actually is is unknowable to us, being contingent on many accidental cultural factors.
 This limitation is not in itself susceptible to mathematical scrutiny, but the fact that there is such a limit, whilst the set of whole numbers continues forever without bound, is a mathematical truth.
The term standard is therefore intuitively taken to correspond to some necessarily finite portion of "accessible" whole numbers. In fact the argument can be applied to any infinite set of objects whatsoever  there are only so many elements that we can specify in finite time using a finite set of symbols and there are always those that lie beyond the limits of our patience and endurance, no matter how we persevere. We must admit to a profusion of nonstandard elements too large or too anonymous to grasp within any infinite set.
Principles of the standard predicate
The following principles follow from the above intuitive motivation and so should be deducible from the formal axioms. For the moment we take the domain of discussion as being the familiar set of whole numbers.
 Any mathematical expression which does not use the new predicate standard explicitly or implicitly will be termed a Classical Formula.
 Any definition which does so is, of course, termed a NonClassical Formula.
 Any number uniquely specified by a classical formula is standard (by definition).
 The nonstandard numbers are precisely those which cannot be uniquely specified (due to limitations of time and space) by a classical formula.
 Nonstandard numbers are elusive: each one is too enormous to be manageable in decimal notation or any other representation, explicit or implicit, no matter how ingenious your notation. Whatever you succeed in producing is bydefinition merely another standard number.
 Nevertheless, there are (many) nonstandard whole numbers in any infinite subset of N.
 Nonstandard numbers are completely ordinary numbers, having decimal representations, prime factorisations, etc. Every classical theorem that applies to the natural numbers applies to the nonstandard natural numbers. We have created, not new numbers, but a new method of discriminating between existing numbers.
 Moreoever  any classical theorem that is true for all standard numbers is necessarily true for all natural numbers. Otherwise the formulation "the smallest number that fails to satisfy the theorem" would be a classical formula that uniquely defined a nonstandard number.
 The predicate "nonstandard" is a logically consistent method for distinguishing large numbers  the usual term will be illimited. Reciprocals of these illimited numbers will necessarily be extremely small real numbers  infinitesimals.
 There are necessarily only finitely many standard numbers  but caution is required: we cannot gather them together and hold that the result is a welldefined mathematical set. This will not be supported by the formalism (the intuitive justification being that the precise bounds of this set vary with time and history). In particular we will not be able to talk about the largest standard number, or the smallest nonstandard number. It will be valid to talk about some finite set that contains all standard numbers  but this nonclassical formulation could only apply to a nonstandard set.
Formal axioms for IST
There are three axioms of IST to add to the established ZFC set theoretic axioms  conveniently one for each letter in the name: Idealisation, Standardisation, and Transfer. All the principles described above can be formally derived from these three additional axiom schemes.
I : Idealisation
 For each standard, finite set F, if there exists a classical relation R such that R( g, f ) holds for all f in F and some g, then there is a particular G such that for any standard f we have R( G, f ).
This very general axiom scheme upholds the existence of 'ideal' elements in appropriate circumstances. Three particular applications demonstrate important consequences.
Applied to the relation ≠
More precisely we take for the relation R ( g, f ) : g and f are in infinite set S but are not equal. Since "For every standard, finite subset F of infinite set S there is an element g in S such that g ≠ f for all f in F."  say by choosing g as any element of S not in F  we may use Idealisation to derive "There is a G in infinite set S such that G ≠ f for all standard f in S ." In other words, every infinite set contains a nonstandard element (many, in fact).
Applied to the relation <
Since "For every standard, finite set of natural numbers F there is a number g such that g > f for all f in F."  say, g = maximum( F ) + 1  we may use Idealisation to derive "There is a G such that G > f for all standard f." In other words, there exists a natural number greater than any standard number.
Applied to the relation ∈
More precisely we take for R ( g, f ) : g is a finite subset of S containing element f. Since "For every standard, finite subset F of S, there is a finite set g such that f ∈ g for all f in F."  say by choosing g = F itself  we may use Idealisation to derive "There is a G such that f ∈ G for all standard f."
S : Standardisation
 If A is a standard set and P any property, classical or otherwise, then there is a unique, standard subset B of A whose standard elements are precisely the standard elements of A satisfying P (but the behaviour of B's nonstandard elements is not prescribed).
T : Transfer
 If all the parameters A,B,C,..., W of a classical formula F have standard values then F( x, A, B,... W ) holds for all x's as soon as it holds for all standard x's.
From which it follows that all uniquely defined concepts or objects within classical mathematics are standard.
Formal justification for the axioms
Aside from the intuitive motivations suggested above, it is necessary to justify that additional IST axioms do not lead to errors or inconsistencies in reasoning. Mistakes and philosophical weaknesses in reasoning about infinitesimal numbers were the reason that they were originally abandoned for the more cautious, but rigorous, limitbased arguments developed by Cauchy and Karl Weierstrass.
The approach for internal set theory is the same as that for any new axiomatic system  we construct a model for the new axioms using the elements of a simpler, more trusted, axiom scheme. This is quite similar to justifying the consistency of the axioms of nonEuclidean geometry by noting they can be modeled by an appropriate interpretation of great circles on a sphere in ordinary 3space.
In fact via a suitable model a proof can be given of the relative consistency of ZFC + IST as compared with ZFC: anything (correct or incorrect!) that can be proven within internal set theory can be proven in the ZermeloFraenkel axioms alone.
External links and resources
 Robert, Alain (1985). NonStandard Analysis John Wiley & Sons. ISBN 0471917036