Possbile? Thinking of going April 2009 for about 6 to 8 days. Is it possible to get around w/o a car?
Iceland -- without a car
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How far "around" do you want to go? We recently went w/o a car rental. Reykjavik can ABSOLUTELY be done on foot. It's so tiny that, by the time you find a parking space, you may as well have walked.
As far as getting to the outskirts -- Harfnarfjordur is easily accessible by bus. We took tours to the Blue Lagoon and the Golden Circle on Iceland Excursions -- if you weigh in the cost of gas, it wouldn't have saved us $$ to rent a car for those. They also run tours to the south coast, Reykjanes peninsula, etc.
That's just the west, though. Not sure what the logistics would be if you wanted to circle the entire island. Doing it in a week without a car might be near-impossible.
We spent a week in Iceland without a car. But it depends on what you want to do, and how much you want to see and spend.

If you want to conserve on money, then having a car is the way, but you will be limited in where you can go.
If you can spend more, you can go further and see more places.
We took the Golden Circle Tour bus, and flights to Heimey, Greenland, and Akureyri. We saw a lot in a little time, and have a lot of memories.