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In the center of downtown Reykjavik, at the Ingólfstorg square, lies Stofan Café.
The name Stofan means 'living room' and that's the kind of cozy atmosphere they aim for. The place has a comfortable typical 'Icelandic grandmother' decor with couches and retro knicknacks on the walls. It's a great place to read a book or spot some of the current Icelandic intellectual elite.
Great coffee, tea, a selection of bottled and draft beers, as well as some light courses are on offer. The location is fantastic, since it's just a stone's throw away from the waterfront, and at the bottom of Laugavegur, the main Icelandic shopping street.
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