We went to Iceland over Thanksgiving with our 20 month old and 5 year old. I know most people might not think Iceland is the place for young kids, but we loved our family time there and found it very easy, educational and fun to take our kids! We stuck to mostly west and south Iceland and spent a total of 6 nights, but we could have easy stayed for another 2 weeks! There is so much to see and do, and the kids loved all the geothermal pools and lagoons. The mountains, waterfalls, lava fields...every second was just awe inspiring to look around. So much natural beauty in one spot it is hard to process. We only did one scheduled tour which was with Into the Glacier, in which you take a old missile truck to an ice cave on top of a glacier, and man was it worth it! For anyone on the fence on Iceland I urge you to go!!!! With or without kids it will be amazing! And to top it off...we saw the northern lights!! I wrote in grave detail on my blog Coloring the Map if you would like more on our itinerary and experiences.
Iceland is super kid friendly. It's one of the few places in Europe where the birth rate actually exceeds replacement rate. And they are such a trusting society, that (at least in the past) they could leave the stroller/baby outside while they (meaning adults) pop into a store or post office or whatever. I don't have kids but I can see why Iceland appeals to just about anyone. Probably the only downside is you really can't take small kinds into a hot pool like Blue Lagoon because it's just too hot for them.
Coloring the Map - how do I access your blog of the trip to Iceland?