Stayed for 5 nights and this cozy hotel served as a wonderful base for exploring downtown -- within walking distance of the main shopping street to one side, the marina to the other, and the symphony hall straight ahead. The famous hotdog stand is a mere 2 short blocks away. The main BSI bus terminal is about a 15 minute walk away. The cathedral is about an 8 minute walk up the hill. There is a micro bar downstairs that is very popular at night & serves a good variety of beers.
Breakfast (extra charge) is available in the same space from 7-10am.

Pros:
Fantastic location, close to the bus stop, tours will pick you up from the front door, LOTS of places to eat & shop nearby, convenience store pretty much across the street, good continental-type buffet breakfast (I really enjoyed the fresh baked bread from the local bakery), Free wifi, clean room decorated in a modern fashion, comfy bed, good value for what you get, friendly & helpful staff

Cons:
Not much of a view outside the rooms, light sleepers might be bothered by the noise from weekend bar hoppers

All in all, I would recommend staying here. There are only 30 rooms, so book right away or you could miss out.

Had a fantastic stay here.

The good:

Great hotel in a great location, close to pretty much everything downtown
Lovely staff, super helpful.
Great bar downstairs
Great water pressure and showers, despite the sulphur smell.
Free parking out the front if you rent a car. Name another hotel in a capital city where you can park for free outside the front door.... :)
Free wifi - always a winner..

The not so good.

Can be a little noisy on Friday & Saturday night as there are a couple of bars/clubs nearby and these guys go for it.
Beds were maybe a little soft, but no big deal really.

All in all though, would totally recommend staying here though.

As the name suggests, the hotel is centrally located in Reykjavik. There are no parking space available by the hotel but there's some parking space around the hotel - if you are lucky. There are plenty restaurants, bars and night clubs just next the hotel, which is nice in general. However on weekends this will mean noise caused by people having good time and also by the music played in bars. If your room is facing the street and is at low floors it will disturb your sleep. I'm not a light sleeper and usually the noise is not a problem for me, but I propose to check where you room is when you are staying over weekend. Hotel has it's own bar downstairs and it offer probably the best foreign beer selection in the city. Bar closes at 23:00 already and it is used for simple breakfast buffet serving at morning. Even if the selection is simple it is quite nice and I didn't really miss any basics. Stuff seems to be quite young and I believe that at least some of them are foreign students or similar. In any case they where providing good service topped with smiles. The room itself was not too large, as you can expect from a city hotel with this price level. Comfy bed is taking most of the space in room itself. Bathroom was nice and well cleaned. If you like to stay at center with couple of steps from restaurant and bars, this is your choice. Stayed for 3 nights.

We loved the location, the staff (especially Heiðrún Harðardóttir and the servers for the breakfast buffet), the price and the breakfast buffet. Extremely resonable price! The staff were so, so, so helpful.