HotelChatter

The 56 rooms are filled with interesting custom furniture, parquet floors, and lamps that harken back to a time of great industrial creativity. You get all the latest goodies though: flat-screen TVs, coffee makers, electronic safes, Bang & Olufsen telephones, minibars, and trouser presses.

The suites get Hastens beds and B&O stereos. The Tower Suite may well be the coolest room in the country. The highest point in the top right of the photo here, it has a 360-degree view of the city and harbor, with furniture that will make you think you should be in a flapper dress chatting with F. Scott Fitzgerald.

The Silfur restaurant here is also one of the best in the city, serving French cuisine in a dramatic room that would fit right into a Philippe Starck portfolio.

Doubles at Hotel Borg are $257 to $387 on their own site, sometimes under $200 on booking sites like Expedia. The Tower Suite lists for $820 to $1,408 depending on the number of bedrooms booked (from 1 to 3).

Ed. Note: Tim Leffel actually wrote this Iceland Hotel Guide before Iceland experienced a national meltdown due to the banking crisis. That said, Iceland's loss is a traveler's gain. Tim sums it up best in this article which he wrote for Tripso:

As the free-lending banks on the small island nation crash and burn, Iceland is facing a “national bankruptcy” according to some reports. As unbelievable as this would have sounded a year ago, for the moment it is cheaper to vacation in Iceland than it is to do so in New York City. Everything is half the price it was just seven months ago.