I have been on Icelandair several times and I like it. I have been in Economy, so I cannot really give you any information about Business.
I think the service is really good, and as far as the food goes, I find it to be better than some of the other airline food. I am pretty short 5'3, and I am not sure how tall you are, but I fit very comfortably in the seats and do not find them cramped at all.