My wife and I stayed here this past October in the "summer cottages" and enjoyed our stay. The cottages were simple, but nice and clean. The only downside to them is that you can hear pretty plainly through the walls if someone is staying in the other half (the cottages are duplexes). Luckily the people staying next to us were very quiet so it wasn’t a problem.
The hotel staff were all extremely friendly and most spoke very good English. The breakfast was pretty standard fare for the hotels in Iceland. Different types of breads, cheeses, meats, and vegetables as well as cereals.
I don’t remember exactly what it cost, but it was quite a bit cheaper than the Hotel Lundi which is why we stayed there.
Room Tip: Check out the gas station across the street for some good food and to mingle with the locals.