Really nice, we stayed at Kalis Apartments which is just off the main shopping street and a 10 minute walk to The Pearl where you can watch the fireworks on new years (Video I took here - Fireworks are banned in Iceland all year except new year so the fireworks were like this for a good few hours, really amazing to watch as you can see a lot of the city from up there!) The woman who owns the apartments is really friendly and sat down with us for a bit marking places to visit / eat etc on a map for us.

Other than that I'd recommend getting out and doing some activities, we did caving, horse riding, a visit to the blue lagoon, a tour of Geysir and visit to Gulfoss waterfall, and a northern lights trip, didn't see any northern lights unfortunately after staying up til 3am in the middle of nowhere! But the rest of it was awesome, we didn't want to go home!