Resting on the edge of the Arctic Circle and sitting atop one of the world's most volcanically active hotspots, Iceland is nowadays thought of for its striking mix of magisterial glaciers, bubbling hot springs and rugged fjords, where activities such as hiking under the Midnight Sun are complemented by healthy doses of history and literature. It's unfortunate, then, that one of the country's earliest visitors, the Viking Floki Vilgeretharson, saw fit to choose a name for it that emphasized just one of these qualities, though perhaps he can be forgiven in part: having sailed here with hopes of starting a new life in this then uninhabited island, a long hard winter in around 870 AD killed off all his cattle. Hoping to spy out a more promising site for his farm he climbed a high mountain in the northwest of the country, only to be faced with a fjord full of drift ice. Bitterly disappointed, he named the place Island (literally "ice land") and promptly sailed home for the positively balmy climes of Norway.

A few years later, however, Iceland was successfully settled and, despite the subsequent enthusiastic felling of trees for fuel and timber, visitors to the country today will see it in pretty much the same state as it was over a thousand years ago, with the coastal fringe , for example, dotted with sheep farms, a few score fishing villages and tiny hamlets - often no more than a collection of homesteads nestling around a wooden church. An Icelandic town, let alone a city, is still a rarity and until the twentieth century the entire nation numbered no more than 60,000. The country remains the most sparsely populated in Europe, with a population of just 272,000 - over half of whom live down in the southwestern corner around the surprisingly cosmopolitan capital, Reykjavik. Akureyri , up on the north coast, is the only other decent-sized population centre outside the Greater Reykjavik area.

But if the coast is thinly populated, Iceland's Interior remains totally uninhabited and unmarked by humanity: a starkly beautiful wilderness of ice fields, infertile lava and ash deserts, windswept upland plateaux and the frigid vastness of Vatnajokull, Europe's largest glacier. Even in downtown Reykjavik, crisp, snow-capped peaks and fjords hover in the background, evidence of the forces that created the country. And Iceland's location on the Mid-Atlantic ridge also gives it one of the most volcanically active landscapes on Earth, peppered with everything from naturally occurring hot springs, scaldingly hot bubbling mud pools and noisy steam vents to a string of unpredictably violent volcanoes, which have regularly devastated huge parts of the country. It's something that Icelanders have learned to live with: in June 1998, when Reykjavik was rocked by a major earthquake, the ballet dancers at the National Opera performed right through it without missing a step.

Historically, the Icelanders have a mix of Nordic and Celtic blood, a heritage often held responsible for their characteristically laconic approach to life - taps in hotels often drip, buses don't depart to the stroke of the driver's watch, and everybody, including the President and the Prime Minister, is known by their first name. The battle for survival against the elements over the centuries has also made them a highly self-reliant nation, whose dependence on the sea and fishing for their economy is virtually total - hence their refusal to allow foreign trawlers to fish off Iceland during the diplomatically tense 1970s, sparking off three "Cod Wars", principally with Britain. However, their isolated location in the North Atlantic also means that their island is frequently forgotten about - Icelanders will tell you that they've given up counting how many times they've been left off maps of Europe - something that deeply offends their strong sense of national pride. For all their self-confidence though, they can seem an initially reserved people - until Friday and Saturday nights roll around, when the bjor starts to flow, and turns even the most monosyllabic fisherman into a lucid talkshow host, right down to reciting from memory entire chunks of medieval sagas about the early settlers.