Although most visitors to Iceland arrive by air into Reykjavik, some lucky travelers ferry in from the Faroe Islands/Denmark and arrive in the idyllic bohemian hamlet of Seydisfjordur, on Iceland's eastern coast. I have to say it was one of my favorite places in Iceland, though as I was very lucky with the weather there, I'm sure that helped!
With pretty multicolored wood houses (built by Norwegian merchants), only two restaurants and one supermarket, and a handful of hotels, one would never call it bustling, but its spectacular location can't be beaten. The sheer snow-capped mountains surround it on all sides, with beautiful waterfalls cascading down creating lovely gushing water music, but also causing a large avalanche threat (an 1885 tragedy killed 24 people and in 1996 a factory was flattened). The steep mountain pass leads the only way out of the valley, snow-laden even in mid-summer, and the only way to get to Egilsstadir and the rest of Iceland.
The fjord is 17km long and a rough dirt track winds its way to the end. The main settlement began in 1848 as a trading center and it found a boom product in herring. During the second world war it was a British and American base (an oil tanker suffered a close German bomb sinking to the bottom of the fjord), but now bases its economy on fishing, the ferry and a growing artist/musician/crafts community.
Seydisfjordur is a technology leader as well as being the connection with the rest of the world, offering the location for the first submarine telephone cable to Europe (1906), the first high-voltage hydro electric power station (1913). Skiing, kayaking, bird-watching, hiking and even Settlement Era archaeology (at Skalanes on the mouth of the fjord) are just some of the possible pursuits available.
Source: Lonely Planet Iceland 7th Edition, 2010