Iceland is a stunningly beautiful place if you enjoy strange and desolate landscapes. Because it is so close to the Arctic Circle, the amount of daylight varies dramatically by season. The sun sets briefly each night in June, but it doesn't get fully dark before it comes back up again. In the March and September equinoxes, days and nights are of about equal length, as elsewhere in the world. If you go in December, it's almost 20 hours of gloom and darkness. Summer is definitely the best time to go, and even then the tourist traffic is still mild.
The midnight sun is a beautiful sight and one definitely not to be missed. It is easy to lose track of time when the sun is still high in the sky at 11PM. Early or late winter, however, can be surprisingly good times to visit. In late January, daylight is from about 10AM to 5PM, prices are lower than in the high season, and the snow-blanketed landscape is eerily beautiful. (Some sites are, however, inaccessible in the winter).
Source: Wikitravel.org .