Here's what I'd recommend:
The Blue Lagoon - a bit of a tourist trap, but really smart, and if you're taking girls with you, well, they'll love it! Very relaxing and not massively expensive. Try the dipped ice creams in the cafe there.
In Reykjavik, you should visit the cathedral - worth it for the look out over the city from its spire. Coffee shops in the town (Try Mocca). Icelandic fish and chips is a pocket friendly restaurant near the harbour.
You can go whale watching from Reykjavik, but you're most likely to see dolphins and minke whales. For the bigger and better Whales, go to the north coast.
Pingvellur is a must - a rift valley and V impressive (well, I thought so). Geysir is a tourist trap, but worth a few hours of your time. For a more adventurous (i.e. less touristy) experience explore the peninsular around the Blue Lagoon. Lots of geothermal activity to see along with hugely impressive lave fields. In the area you may come across all these fish drying stands - well worth a look. Kerid is a volcano cone you can actually enter (good for kids - it's very small).
Have a look at the Viking sagas in the museum in town.
Didn't get to explore along the south coast - If I were to go again, I would definitely go to see the iceberg lagoon down there.
Everyone says it - food and drink is very expensive, so stock up in the supermarkets for lunches etc. Try the Malt drink - lovely! And if you're daring, try the black death vodka.
It is windy all the time, so dress appropriately, take lots of lipsalve as well. The weather is very changeable so be prepared.
Everyone is exceptionally well behaved on the roads, and driving is easy. Most of the link roads are single carriageway metalled roads, but out in the country you can expect gravel tracks - avoid going off road unless you know what you're doing and you have a properly equipped vehicle (I think that off-roading as we'd understand is illegal anyway). The roadside verges are VERY soft and it's easy to get bogged in.
Take a camera, and nick the shower caps in the hotel so you can protect it against the rain. I took my dslr and the things I used most were the tripod and ND filters for those moody shots of waterfalls.
The northern lights only regularly appear in winter - we went in April and were told that 'it's too warm now!'
We found the Icelandic people very friendly and helpful.
All in all, we had a great time and would go back.
Hope you have a great trip!
One of the best holidays i've had 
