Most ISPs, in most countries, are required by law to record everything that passes through your service. At least, the best they can. ISPs do this to protect themselves (legally), as well as having means of providing information to law enforcement (with a court order).
Things like encrypted passwords (HTTPS links) do not show details, only that you were connected.
Also, ISPs show all connections to your service, so things like Torrents can be tracked when you are downloading a lot.
The bottom line is, however, that ISPs don't have the time or resources to look at all this stuff, there is too much data. Only when legal matters come up that want records of what a specific customer did, do the logs get looked at...