I am almost certain that smoking is not allowed. If they fly into the US, then I believe flights are non-smoking. This applies to all airlines coming into/out of the US.
But I could be wrong

http://www.myfreeairfare.com/smoke.html
Here is something for you to read.
and what do you know! I was right!

We flew Icelandair from Baltimore to Reykjavik and then on to Glasgow, the plane was full, felt crowded in the seat, the seating was three on each side of the aisle, food was less than mediocre, but the price was really good. You get what you pay for and the plane took off and landed safely every time so each was a very good flight!!! We loved Iceland and would use Icelandair again but I am happy to say we are flying USAir to France this year, I like planes that have rows with just two seats together and individual tv screens. Helps the flying time pass quicker. Go to Iceland, it's a beautiful, fascinating country. Deborah

Thanks for the replies.

DA, I too prefer the 2-seat configuration, but I think they can keep their costs lower by flying 757s vs widebodies.

Just in the early planning stages, but getting excited about seeing Iceland, which sounds wonderful. Any other advice you want to send my way is appreciated.

Absolutely no smoking on Iceland air.
I also disagree with the "you get what you pay for" remark. I have used this airline many times. It is a very nice airline. Nice service, clean planes, good food. Keflavik Airport is one of the nicest airports in Europe.
And no, I am not from Iceland.

I can just tell what my experience with Icelandair was on the different planes we flew on, my seats were broken or not totally functional on two planes, the food was better for breakfast than dinner, which was really quite bad, the attendants did pass out lots of iceland water which was great but the plane just looked worn.

if u fly in/out of US then u know there is NO smoking. what a silly question to ask.

bluestructure

What a silly statement to make about her question.

Actually, a couple of airlines (Aeroflot and Egyptair, I think) are allowed to permit smoking on flights into and out of the US. This has to do with the nature of regulatory agreements between countries.

Silly, bluestructure?

No smoking, but on one Icelandair flight I did have a huge guy sitting behind me with his hand on the top of my seat, moving it constantly as he talked to his friends. But Iceland was worth even that!

They're neither the best nor the worst airplanes I've ever flown on, but I've never had any problems with their service...and Reykjavik's only five hours away! (Go for it)

Aeroflot flights to the US are non-smoking, infact I believe all Aeroflot flights as of March this year became non-smoking.