All of Iceland is incredibly scenic. They have more varieties of desolation than you will find anywhere else in the world
The places I would recommend are:
- Reykjavik: it's a very cool town and small enough to walk around. It's hard to miss the Hallgrímskirkja. Lots of interesting little shops in town in Laugavegur and Skólavödustígur. The museum is very interesting too. Also check out the newish convention centre at night.
- Have a swim at the Blue Lagoon. If you eat there I'm pretty sure the chicken is actually puffin.
- The best lobster I have ever eaten: http://www.fjorubordid.is/
- The Krýsuvík geothermal area on the mid-Atlantic ridge.
- The "golden circle" area is not far from Reykjavik: Gullfoss (Golden Falls) the Geysir geothermal area and Thingvellir national park.
- There are a bazillion waterfalls but Skógafoss is not to be missed and it is on the way to:
- The black beaches and basalt formations of Vík í Mýrdal
- Jökulsárlón the "glacial river lagoon." They filmed James Bond car chases on ice here.
- Dettifoss waterfall in the Vatnajökull National Park. There are a couple of other very nice waterfalls just downstream as well.
- Ásbyrgi canyon. There's an amazing lake here: Botnstjorn.
- The whole area around Lake Mývatn is full of geothermal goodies. Check out the region around Krafla. The Grjótagjá lava cave and thermal spring was very interesting and photogenic.
- More waterfalls: Gođafoss
- The Northwest Fjord country is a bit remote but worth the trip.
- Dynjandi waterfall (while you're up that direction)
- The wreck of the Gardar BA 64
- The Snćfellsnes peninsula and the Snćfellsjökull volcano/glacier
I'm sure there's lots of other great stuff we missed. Try a 4WD glacier tour. If you're there at the right time of year (we weren't on either trip) check out the puffins and other nesting seabirds.
The roads aren't great (the main highway has gravel bits and single lane bridges in places) but there is hardly any traffic outside of Reykjavik so driving is pretty easy. The only part that freaked my wife out was the the northwestern fjords where we were traversing hairpin turns in a dirt road in huge winds. She's such a wuss
The route we took is marked in blue on the attached map.
There are some pictures from our 2010 trip here:
http://rickstevenson.smugmug.com/Tra...4791489_5b2CLS
Cheers,
Rick.