We stayed in Reykjavík for Christmas, New Years, and our last nights in Iceland. While in the city, we were lucky enough to rent a room on Grettisgata very close to Hallgrímskirkja, the largest church in Iceland.
Our room on Grettisgata was managed by am amazing couple. An Icelandic film director, whose most recent work, a ghost comedy (totally under-appreciated genre BTW) and his partner had actually shot a film in the room we stayed in; here's a trailer where you can totally see our room! They were great hosts and took us in over the holidays and gave us advice as we toured the city and countryside.
Great advice from Ágúst & Anna Maria:
• Bring your warmest clothes
• Parking tickets can be paid at any bank and are discounted if you pay immediately
* Christmas is a solemn and family centered time in Iceland (most things are closed)
* Be at the Hallgrímskirkja church around 11PM (23:00) New Years Eve
* 4WD in the winter is a MUST
* Make reservations at restaurants on holidays