The Golden Circle
The Golden Circle takes in three popular attractions all within 100km of the capital: Þingvellir, Geysir and Gullfoss. It is an artificial tourist circuit (ie no valley, natural topography, etc marks its extent) loved (and marketed) by thousands, and not to be confused with the Ring Road, which wraps around the entire country (and takes a week or more to properly complete).
However much you strain to discover some underlying charm, Egilsstaðir isn’t a ravishing beauty. It’s the main regional transport hub, and a centre for local commerce, so its services are quite good (including quality accommodation and dining options). It's growing fast, but in a hotchpotch fashion and without a proper town centre.
Although it’s no bigger than many European villages, the southeast’s main town feels like a sprawling metropolis after driving through the emptiness on either side. Its setting is stunning; on a clear day, wander down to the waterside, find a quiet bench and just gaze at Vatnajökull and its brotherhood of glaciers.
Keflavík & Njarðvík
The twin towns of Keflavík and Njarðvík, on the coast about 47km southwest of Reykjavík, are a rather ungainly expanse of suburban boxes and fast-food outlets. Together they’re known as ‘Reykjanesbær’. Don't stay here unless you’ve an early flight; it's worth the 40-minute ride into Reykjavík.
If you visit only one town in the Eastfjords, this should be it. Made up of multicoloured wooden houses and surrounded by snowcapped mountains and cascading waterfalls, obscenely picturesque Seyðisfjörður is the most historically and architecturally interesting town in east Iceland. It’s also a friendly place with a community of artists, musicians and craftspeople.
Many Icelanders believe that their country is populated by hidden races – jarðvergar (gnomes), álfar (elves), ljósálfar (fairies), dvergar (dwarves), ljúflingar (lovelings), tívar (mountain spirits), englar (angels) and huldufólk (hidden people). Although some are embarrassed to say they believe, most refuse to say hand-on-heart that they don’t believe.