I read on europa.eu that a non-EEA driver's license can be exchanged for an Icelandic license by following this procedure:
1. Go to: the Icelandic local District Magistrate, or the local police regardless of your place of residence.
2. Hand in the following documents:
a. A photograph (35x45 mm).
b. Foreign driving licence.
c. A statement concerning your health, or if appropriate a health certificate issued by a doctor.
Is it just that simple? No proof of residency? No eye or medical test? I have a US State license but want to exchange it for a license that I can use throughout the EEA so I can buy a car and obtain proper car registration and insurance. Iceland's requirements seem much easier than other countries I have researched.