Is it worth doing a self driving tour or just do a guided tour around that time of year? Also - we will be there for 3 full days before heading to Ireland. Any recommendations on sites to see within that time frame? Thanks!
Although the weather in Iceland is more unpredictable than nearly anywhere else, one thing is certain; during your visit, you will have less than nine hours of sunlight, daily. Most sites in Iceland are experiences best observed during the daylight. And, with limited time, I'd suggest renting a car. KEF to Reykjavik is over 40 miles one way.
A few tips: fuel is very expensive, the roads are narrow but well maintained, sheep graze everywhere (often inches off the roadway) and, while driving outside population areas, keep a close eye on the fuel gauge - filling stations are sparse in the countryside. You will need a chip enhanced credit card to purchase fuel.
Pick up your rental at KEF (shop around for the best price), stay at a guesthouse in Reykjavik, buy alcohol at the duty free store downstairs at KEF.
The Golden Circle is an easy one day round trip from Reykjavik, and worth doing. Gullfoss is truly spectacular and the geysers are fascinating, but staying in that area overnight is more expensive than Reykjavik and not as satisfying.
When you return from Iceland, your friends will ask you if you went to the Blue Lagoon. It is expensive, pleasant and very touristy. If you decide to go, book a time prior to your arrival - they generally don't accept walk-ins.
A nice free walking tour is available in Reykjavik, (citiwalk.is)...if Johannes is your guide, tell him I said hi - he's a fan of the Portland Thorns.
If you're only there for 3 full days, I would personally stick to Reykjavik as your base (a car is not needed there). There is enough to do there in a leisurely fashion for three days. If it was my first trip to Iceland, I wouldn't want to miss it. You can always take a day trip one day with an excursion company (look on the Reykjavik Excursions website for ideas), but the city itself can easily take two days of touring. I wouldn't bother renting a car for that short time frame, it's not enough to make it worthwhile especially because the days will be so short. Once you get a short taste of Iceland (like I did through the Iceland Air layover program), I bet you'll be back!