Our family of four loved staying here! As others have mentioned, Gudrun and David are very friendly and helpful, the house is private, and it's really convenient to have a self-contained space. We also really loved being so close to the seafront and in a quiet (very nice) neighborhood.
As Iceland is expensive, self-catering here is a great option: we enjoyed our coffee and meals on the patio, and having a pleasant "home" makes it less urgent to get going first thing in the morning. We had a car ($370 for 4/5 days), so we drove into town in 5 minutes (max) and parked at Tradarkot in town -- cheap and easy. There are supermarkets, liquor stores, coffee shops, and thermal pools within a few minutes' drive, too.
Reykjavik's center is beautiful and compact. Be sure to try Microbar and Mikkeller and Friends, as well as Braud & Co.
We would definitely stay here again!