The tower guesthouse is superbly located, just below the Hallgrimskjirke (big church), 2 short blocks up the hill from the main shopping street and a short walk to the old town.
This place was more self-help than I realized. We weren't sure exactly what time we would arrive to check-in, so estimated a late afternoon arrival. When we arrived mid-afternoon, we were stuck waiting outside as there is no staff onsite most of the day. So if you are looking for service 24/7 this isn't the place. When we finally got a hold of the innkeeper (not very easy as she originally didn't answer her cellphone, then when she did I realized that in iceland, when you use a public phone to call a cellphone, you pay per 15 second interval.. $$$), she quickly came to the guesthouse and let us in. She also lives in the building on the top floor. Her command of English is excellent (like a native speaker).
We had a room that was very large with hardwood floors and a separate bedroom and living area and high ceilings. Nice TV with lots of channels (not that that should matter when you are visiting from far away), stereo, dvd player, etc.. The bathroom was on the floor but shared with 2 other rooms. It was clean and spacious. The shared kitchen was very large, very bright, lots of counter space, well-stocked and had a large table to eat on. The hot tub outside on the balcony is nice indulgence though not sure how much maintenance it gets.
One warning though, the outside of the building is definitely not up to par with the inside. Long overdue for some upkeep.
As for a number of websites that refer to this place as 'upscale', not sure I'd go that far. It's nice and also somewhat pricey, but everything in Iceland is.
This review is the subjective opinion of a TripAdvisor member and not of TripAdvisor LLC.