What Do I Need To Know For A Cycling-touring And Camping Holiday In Iceland?

You need a sturdy bike with strong brakes; MTB ideal. Your tent must be as lightweight as you dare, but also able to withstand high winds and heavy rain.  Hopefully you won't get too much of either, but it will be horrid if you aren't prepared for them.  

Make sure you know something about repairing bikes and tents, as well as using a cooking stove, before you go.  Practice pitching the tent quickly.

Are you planning to stick to main routes or to go off road? The route through the centre of the island is particularly dusty and rough.  So are sections of roads in the east.

Keep in mind that buses in Iceland can usually take bikes, if you do end up on a horrible wet or dusty stretch you may just want to flag down a bus.

The west is wettest.  If you land at the airport and it's pouring down, you may just want to jump on the bus and go at least 100 miles to the north east.

Cycle clockwise around Iceland.  You'll find virtually all other cyclists do, so you'll make friends with people  you keep seeing at different campsites.

Go with a friend to keep your spirits up when you've just had your 3rd puncture that day and it starts snowing (in August).

Bring a swimsuit, walking shoes and a camera.  In summer, be prepared for any sort of weather, day and night.

Get a good guidebook to give more details than I can here!