Iceland has beautiful handicraft.
While walking down Laugavegur Street, we saw a number of shops selling beautiful glassware / glass art pieces. These are made of clear glass and coloured glass and can be displayed by either putting it on a shelf or hanging it on a window.
The design is modern and tasteful. We didn't buy any because we weren't sure how best to carry it home. But I'm sure the shops will tell you how.
There are also beautiful cards of Icelandic drawings. Again, the design is very modern and artistic.