In reply to Ian Straton: Jojo joblin not logged in.
There are three routes that cut north-south through the interior. The F35 Kolja (that may be spelt wrong) is the most bike friendly. Takes about three days from Varmahlid south to Pingvellir on a dirt road. Riding across a plateau ringed by peaks and two icecaps. Camping is the way to go to save costs, wild camping is possible except in a couple of park areas.