Stayed here because I got a cheap offer and it seemed well located. I upgraded to a deluxe room which I think is the way to go as some of the negative reviews stem from the basic rooms. The room I had was spacious and well equipped with its own fridge. The bathroom looked recently refurbished and you get free WiFi. The centre of Reykjavik is approx 15 mins on foot but is a straight forward walk. The cabin has ample free parking and I am currently planning another trip and intend on using the cabin again.

Just come back from a four night break and would like to say what a great place to stay.
Location was 15 minutes walk from the city centre and was easy to get around from there.
The staff were all very friendly and helpful with good English.
The hotel itself was very clean, warm and generally in good repair.
The bar has a beer only happy hour on a Gull Beer which is good value and in the restaurant breakfast and salad bar dinner was plentiful and good value for money. Lots of fresh fruit and breads - good coffee too.
The rooms are small for a standard twin room, however considering the room rate and location, it certainly met our needs. The rooms did seem to carry some noise from next door and with guests checking in and out very early in the night did cause a small issue to us but not worth reporting to reception.

If I returned to this wonderful country I would re book here.

Rooms were clean, warm and comfortable. We had a free upgrade as the Hotel was busy, on the 6th floor with fine views out to sea, but your not here for the view from the hotel as there is so much more to see and do in Iceland!! Breakfast was plentiful but it was a shame hot food was not on offer in the evening. If you return late from a trip it can be difficult to get a decent meal unless you plan where to go.
Our room was deathly quiet apart from traffic outside at peak times. The staff were lovely and could not be faulted for their patience and helpfulness and were very friendly and approachable, even toward the end of their 12 hour shift. Thank you to Iris in the gift shop who sorted out changing our bus back to the airport to include a stop off at the Blue Lagoon before our flight home and answered all our queries.
Yes It may be a pleasant, level 20 minute walk to the city centre along the water front... all part of the experience and there are a few things to see on the way. If you've hired a car you can park easily for no charge after 6pm, or catch the number 12 bus outside the hotel, but if you are fit what's wrong with using your feet!!!
Hotel staff will recommend places to eat, routes to drive, and will tell you all about Icelandic history if you ask them.
I would certainly use this Hotel again, it is a good base for seeing southwest Iceland.