Iceland is an amazing place with a very varied landscape. Icelandic is the official language, but nearly everyone speaks English. Also, everyone speaks at least some Dutch. If you're wanting to see the Northern Lights, don't go in the mid-Spring to mid-Fall. You will just see a lot of sunlight. If you want to explore the hinterlands (via f-roads), you should go in late June to early September.
The currency accepted there is the Icelandic Krona (ISK). Credit cards are accepted nearly everywhere, but be aware that there are not many ATMs outside of major cities. There aren't any "cash-back" options like we are used to in the U.S.
No matter what time of the year you are visiting Iceland, dress for wind protection! This is the only place I've ever been to where my most prized possession was my wind breaker. The climate varies a lot and can change rapidly, so check out average weather for each place, but don't be surprised if it's not accurate. If you're going to be there in the summer or close to it, and you'll be sleeping outside or any area without amazing curtains, you'll appreciate a sleeping mask (or folding over a beanie to cover your eyes).
The people of Iceland were very nice, especially outside of Reykjavik. I was amazed at how kind everyone was and how safe of a country Iceland is.
Tours are expensive. All of them are. I budgeted myself a whale watching tour, which was nice, but don't feel like you're missing out if you can't afford a tour. The landscape is free to admire from all over the island. There are plenty of hiking trails around the country for those looking to explore more than just the ring road. The most popular hike is the Laugavegur trail (or just Laugavegupinn). This connects Thorsmork with Landmannalaugar and is only accessible in the summer. I couldn't even get to Thorsmork in mid-May because of the snow. So if you're going to Iceland to do that hike, make sure you do more research onto when the roads and huts will open for it.
One of the highlights for me, was exploring Vestmannaeyjar (Westman Islands) to the south. You can take a ferry there from Landeyjahofn, and hike around the entire island. That was definitely my favorite hike.
The most convenient way to see Iceland is to rent a super jeep and go exploring. However, that will end up costing quite a lot, so I would not recommend it unless you're rich. Within Reykjavik and Akureyri, there is pretty good public transportation. These buses ONLY TAKE CASH. i believe they are around 500 ISK. There are also buses that take you between major cities on the island, but they run pretty infrequently, and it's not much more expensive to book a domestic flight. Hitchhiking is relatively common and accepted in Iceland (although is slowly becoming less popular). Outside of the Ring Road, or on the Ring Road but in less visited areas such as the Westfjords, it can be harder to find a hitch, especially outside of the summer months. Be weary of drastic weather changes and brutal wind while waiting for a hitch. about 2/3 of the Island's already low population, live in Reykjavik, and a significant portion of the rest, live in Akureyri.
The best all-around way is to just split a rental car that gets really good gas mileage, with three other people, in the shoulder season (it costs more as soon as summer comes), and explore the island. It will be more expensive than hitchhiking, but you will be able to do and see much more, and be able to stock up on lots of groceries from bonus.
Caution: strikes are common in iceland and it would be wise to pay attention to them. Gas prices as of May 2015 were about $2.20/liter
Wild camping is legal in lots of conditions and largely tolerated in almost any situation; though don´t expect to make pity to people and being invited home, this is pretty rare. Internet hospitality networks work quite well especially in the cities. Outside, there are mostly bed&breakfast and pensions that live on tourism, if you say you have no money (nor tent etc) they might accept your collaboration in change for food and accomodation (sort of help exchange).
Hostels ran about $20-25 euros all around the island. All of the ones I went to, were very clean, and most of the owners and staff were very friendly. All of them had WiFi. There are many HI hostels, but not all are. One advantage of a car rental, is a sturdy place to sleep. It can be hard to find a place to put your tent with protection from the wind.
Basic food like oat, legumes can and flat bread is affordable; for all the rest (especially fruit veggies and normal bread) rely on dumpster diving, it works extremely well. Check http://trashwiki.org/en/Iceland for good and detailed info.
If you're going to the store to buy food, go to Bonus. Do not go anywhere else. Look for the yellow flags with a stoned looking pig on them. It would be wise to know what some of the root words are, especially for meat. Kind is sheep, Hros is horse, gris is pig, and so on...
I was expecting to see a lot of fermented whale meat, but i didn't. It's your choice as to whether or not you want to support the whaling industry. Icelanders love hot dogs. If you're looking to buy some hot food, gas stations typically sell hot dogs with the works for 2-3 euros.
Though wifi is free almost everywhere, computers for internet can be paying in some municipal libraries (e.g Akureyri and Reykjavik); universities are the best option to find free access if you don´t have your own device.
I didn't see very many people busking. Maybe one or two the entire time.