Icelandair are what flag carriers were twenty years, slow cumbersome and heavily unionised
They still fly a fleet of B757s, which are bit rough around the edges, but with a healthy enough seat pitch. If you're lucky you may get to fly on one of their newer B767s if you're flying from the states, primarily MSP or SFO
I've only ever flown them out of GLA so I can't tell whats it like to fly from elsewhere, however they've never seemed to be full flights.
The inflight is pretty plain and straight forward, no seatback tvs and very old film on overhead CRT tvs or if you're lucky overhead LCD!
Anyway check this out for a more in depth dissection of all things Iceland air
http://airreview.members.beeb.net/Iceland/index.htm