Great All-purpose Lodging
We stayed at the Nordica for a week in Autumn of 2004. The location is great, within walking distance of a couple decent restaurants, a couple of convenience stores and a grocery store (more on this later). It's also a long but doable walk downtown. The hotel is immaculately clean, and the staff are friendly and helpful.
Our room had a great view of the ocean over the tops of a similarly immaculate city, and the room itself was simply but tastefully appointed in a spare, IKEA-esque mode. The queen-size bed included two separate comforters, too, for ultimate warmth (one for each person, so cuddly to wrap around you).
The breakfast buffet is fantastic, and especially important in Iceland, as everything in Iceland bears an outrageous sales tax, including groceries, but most especially restaurants. Load up at the buffet, which begins with cod liver oil shots but ends with every Western-style breakfast item under the sun, and you'll do okay. The cost of the hotel is so worth it if you factor the included buffet into the price. Don't believe me? Just try finding breakfast for less than $25 a person elsewhere. Unless you want to eat $4.00 pilsur (hot dogs) all day, you will appreciate the Nordica's breakfast offerings.
Oh yes, and I said I'd talk more about the hotel's proximity to restaurants and grocery stores. There's a restaurant right up the street where you can get a dinner buffet for about $35 a person - way cheap. And if you buy groceries, which carry a smaller tax (like 13%) than other items, you can eat even cheaper.
The only drawback to staying at the Nordica was their movie selection. If you plan on spending a lot of time in your room, beware that unless things have changed since we were there, their movie channel replays the same movie over and over, 24/7. We were treated to the amazing Dwayne "The Rock" Johnson opus "The Rundown" all day, every day, for the ENTIRE WEEK. Good God. And all the other channels were in Icelandic. Luckily, we spent most of our time outdoors.
Summary: Good value if you include breakfast; clean, comfortable, convenient.