Until now, google maps has worked fine in Iceland, but Google Nav offers some better features, especially when using it in a car. The system gives navigation instructions out loud, as many are used to from normal GPS car systems.
Google Navigation will understand Icelandic with the newest update
It should be possible with the latest update to control Google Nav by using your voice, and this time by speaking Icelandic. This new technology will soon come with the Android OS, so people won't even have to look for it.