Staple Foods
There are a few foods that might be considered staple foods in Iceland, most notably skyr (description below), but none are common enough to constitute being a staple food. In addition to skyr, fish or lamb is found in nearly every dish.
Regional Variations & Specialties
Þorramatur: a dish with shark meat soaked in ammonia; more traditional than popular
Hangikjot: smoked lamb or mutton boiled and sliced; generally served with potatoes and peas in a dairy sauce
Kleina: deep fried dough
Plokkfiskur: cod, halibut, or haddock mashed with potatoes, onions, butter, flour, and milk, then topped with bearnaise or hollandaise sauce
Skyr: a cheese that looks and tastes like yogurt
Dining Etiquette
Cream buns
Although Iceland is known as an expensive country, they are a very informal country whose dining rules are based on family dining rather than on formal receptions or events. Being invited into a local's home (particularly for business) is somewhat common, but you are expected then to follow their protocol. This begins with a nice bottle of foreign wine as a gift, followed by removing your shoes at the door.
Whether in a home or at a restaurant, you will be considered a guest and their lax dining rules will be given even more flexibility for you as a foreigner, but do try to follow suit. Generally speaking, dining is similar to other Nordic countries and Europe. Eat in the continental style (knife in the right hand, fork in the left), keep your hands visible by resting your wrists on the table, and finish all the food on your plate. If there are shared dishes, don't take the last of the food from a plate unless you first ask and are granted permission.