Not nearly as remote as you think, Iceland features both a gorgeously rugged landscape and a buzzing cosmopolitan city. And due to the recent economic crisis, it’s suddenly less expensive than it used to be.

A short flight from the East Coast of the U.S., many people visit Iceland for its stunning natural beauty – the geothermal springs, the glaciers, the whale watching. The quaint capital city of Reykjavik can either be a stop-over or a destination itself for a long weekend. While technically a city, Reykjavik is more like a large village – there are no skyscrapers and the main downtown is relatively quiet and fairly compact. The people are European in outlook, if somewhat reserved, but nearly everyone speaks English reasonably well.

The city is easily navigable on foot. The main shopping street of Laugavegur runs east-west not far from the seaport. It is lined with hip boutiques on both sides – featuring both European and edgy Icelandic fashions, as well as handmade jewelry. Heading down a gentle hill, the street becomes Bankastraeti, which takes you through the downtown business area.

Make a left and head for Tjornin, or “the Pond”, a favorite spot for Icelanders to feed ducks and other waterfowl. You will pass a small square and the revitalized, ultra-hip Hotel Borg. At water’s edge is the new City Hall. The modernist concrete building is anchored on one side to land and on the other in the pond’s pristine waters. Inside, a café seems to float above the water and a three-dimensional diorama of Iceland shows you just how vast and barren the country is (many areas are not accessible).

The downtown area is home to several museums. The National Gallery of Iceland is a small museum featuring modern and contemporary Icelandic art. Nearby, one branch of the Reykjavik Art Museum features the work of Icelandic artist Erró. Other branches of the Reykjavik Art Museum are dedicated to artists Jóhannes S. Kjarval and Asmundur Sveinsson. All have free admission.

Head back up the hill on Skólavördustígur past yet more shops. At the end is Hallgrimskirkja (Hallgrim’s Church). A new but iconic structure, only consecrated in 1986, the church is currently undergoing exterior renovations. But the tower is still open and gives a panoramic view of the city and surrounding mountains. Outside, a statue of explorer Leif Eiríksson presides over a small square. Across the street is a fortress-like building, the Einar Jónsson Museum, behind which is a sculpture garden with free admission. Enter on Freyjugata.

Set on a forested hilltop just outside the downtown, Perlan (www.Perlan.is) is a multi-functional building set atop geothermal water tanks that provide water to the city. On the fourth floor, there is an observation deck circling the structure and giving 360 degree views of the city and mountains beyond. On the same level is a serviceable cafeteria and on the fifth floor is a well regarded revolving restaurant open only for dinner. The Saga Museum, on the ground floor, depicts famous Icelanders and moments in the island’s history in eerie lifelike detail.

But to really explore Iceland, you should head out of town. Tour buses leave from the city all day and will take you to all major tourist destinations, including the Blue Lagoon and the Golden Circle. If you choose to rent a car, the roads are fairly straightforward to follow. Just watch the speed limits – speeding is a heavy fine and most Icelanders strictly obey it.

Note on prices – the Krona is in flux against the dollar. After a steep decline, it has rebounded somewhat in recent months. Prices listed here are based on 115KR to the dollar as of February 1, 2009. Also due to the currency devaluation, prices have been increasing and will continue to rise. Please check prices prior to departing.