I second that. I was just in Iceland during Easter, and it was amazing. Some thoughts:

I didn't see many big brand name hotels in Reykjavik other than the Hilton. Others have commented on Radisson and other smaller chains... However, in my opinion, if you are going to Iceland, Reykjavik is probably the last place you want to be! It is a plain city...

You can probably go to iceland and use no cash, so make sure you have a credit card with a chip for convenience. Many gas stations are un-manned, and will only take chipped credit cards...

If you really want an adventure, consider flying to London or Paris and take one of the low cost airlines from there. (Assuming you want to go to Paris/London on the same trip)

Icelandic air doesn't seem to have any alliance with any other airlines (As of June 2013, no more miles transfer to Alaskian Air!). But as someone else said, fare from JFK/Toronto and maybe 1 or 2 other big cities on the east coast is served by Icelandic air, so you will often find cheap airfare (under $700 all in) often...

Consider going outside of peak season (June to August) for save on airfare/hotel/rental car cost. Its just as beautiful (often even more beautiful!) during May and September, and less tourist.