Someone has only recently started importing PGS coastline data for iceland, but in some places it's incredibly inaccurate. Some large chunks of the south coast were marked "coastline" around the edges of farms, apparently the original source felt that the huge expanses of sand on our coast all counted as sea, even though they are a fairly permanent bit of land, and are steadily becoming more permanent now that grasses grow on them. The PGS coastline had the road well out to sea, and was obviously nowhere near the real beach/shoreline. I removed large chunks of it entirely. In other parts, the east for instance, I removed points until it went back outside the gps tracked roads.

Iceland Update:
I've added surface tags to the ring road in the east, based on a recent trip around there. I've finished filling in my tracklogs from my trip around the northeast as well, adding almost all of highway 85, and parts of all the towns on the way. (Húsavík, Kópasker, Raufahöfn, Þórshöfn, Vopnafjörður)
I've just about finished dual carriageway'ifying Kringlumyrabraut, miklabraut and sæbraut. Polish is improving, now just to keep filling in blanks, and getting more people involved! (I have no desire to drive around breiðholt and grafavogur collecting tracks ;)

Outstanding issues:
the surface=unpaved tag seems to have no affect on the rendering :(