David, I have been to Iceland - for a longer stay only once - in the 70's. Always wanted to go back - and will someday. As for gear, first comes cameras/film and any left over space is allotted to clothing. Good shoes (essential!!), rain/wind gear. Sweater (can be bought on site - they make great ones). You can usually wash stuff in the hotel - so one or two changes is more than enough. You are not going for a dress-up occasion anyway As for weather changes - the layered look works fine - add and subtract as the temperature requires.
It is a modern country and if you run out of something - you can find it there. Only cabin luggage, of course. Maybe even a small, mini tripod for macro work - about 50% more film and SD cards than you think you are going to use!!!!
What is remarkable is the clear air - mostly geothermal heating and brisk Atlantic winds blowing away any pollution.
If offered "Black Death" - politely refuse (local moon shine - and Icelanders are tough!). Some of the fish dishes are also a bit strange - but not directly life-threatening. Throw in some reading material as books in english tend to be a bit pricy - I usually take some paper-backs and then simply leave them behind. Of course, scour the book stores (there are many - Iceland is the only country with 100 % literacy rate in the world!) Some good photography books - at least that what I have heard.
Have a great trip and post a lot when you are back.