Weather. Iceland sits only a few miles south of the Arctic Circle and you would think it would have a climate similar to Anchorage, Alaska or Whitehorse, Yukon. In fact, even though the capital of Reykjavik sits further north than both of these cities, it's average winter temperature is in fact higher than either New York or Toronto! This is because the gulf stream that carries warm water north in this part of the Atlantic Ocean runs right by Iceland.
Geology. Iceland is just one big piece of lava rock. It lies on the separation of the North American tectonic plate and the Eurasian tectonic plate.
The result of this is that Iceland has many active volcanoes and an unlimited supply of heated geothermal water.
There are no trees. Well, that's not true. All of the trees that did exist in the country were cut down for firewood during the late 1800's. Now, pretty much any tree that you see that's taller than a person has been imported!
All that hot water. So what do you do with an unlimited supply of hot water? Well, there are about 175 public swimming pools in Iceland. Consider that there are about 300,000 residents on the whole island and you figure out that this is a lot of swimming pools. Many are outdoors and are open year round.
Ruth, enjoying one of Reykjavik's outdoor pools.
The other thing you do with all of that hot water is that you heat your homes. 89% of Iceland's homes and businesses are heated with natural geothermal water. Icelanders enjoy ridiculously inexpensive rates for this, and their hydro electric rates are very cheap as well.
Economy. Iceland is going through a difficult period just now, having survived the banking crisis of 2008. All of this really should be in the news more than it is because of the quick recovery of a country who's privatized banking mistakes bankrupted the country in such short period of time. Inflation was nearly 25% during this time when the Icelandic currency crashed versus world markets and private citizens were asked to pay for a private bankers mistakes. They held a referendum and the people flatly refused so monetary controls were put in place to block the removal of financial assets from the country.
A weak currency helped exports and the economy has recovered. The weak currency also helped tourism and the country has registered huge gains in tourism related business over the past four years.
Unemployment had been sitting at around 3% in the years prior to the crash of the banking system. In 2008, it rose to over 7%, and it has been slowly improving.
Elves. Icelandic elves figure prominently in folklore and surveys have pointed out that as many as 26% of Icelanders believe in elves. There are roads that have been diverted or altered to prevent damage to the rocks where the elves live. You don't throw stones in Iceland because you might hit an elf. They are invisible. A 1975 general survey found that only 10% of respondents said that existence of elves was "impossible". However, another 18% said it was "unlikely".