Hello I?m an Icelandic, and a big literature fan, so maybe I can be of some help here.
First of all, Max Carinduff, the writer you're looking for propably is
Hallgr?mur Helgason, as Eric suggested. You're description of what could be referred to as the "Cute generation" in Iceland is actually quite accurate. A generation untouched of war and poverty has grown up in prosperity and luxury their ancestors (or parents for the matter) didn?t even dream about. I'm not sure where the term "Cute" came from, but I?m pretty sure it was invented by Hallgrimur Helgason. In my opinion the word "Cute" in the contex also resembles some irony, for cute as they are, it will interesting how they will react to the current economical crisis. Enough of that though.
Hallgr?mur Helgason is very good author which I recommend, ecspecially his book
101 Reykjav?k (101 being the postal code of the centre of Reykjav?k - the headquarters of the Cute generation). He also won the Icelandic Book of the Year award for
H?fundur ?slands (The Author of Iceland).
Sj?n is getting bigger and bigger in Iceland, exspecially after he won the Nordic Counsil Literary award. Another novelist,
Bragi ?lafsson, is getting quite popular to, at least one of his book,
G?lud?rin (The Pets) has been translated into english, and I think it was New York Times that referred to as one of the translated books of the year in 2008 (Not 100% on that one though).
It might be interesting to know that Bragi is former bass player of The Sugarcubes, Bjork's former band, which gained some international success in the 1990's. Sj?n is also very good friend with Bjork and writes some of er lyrics I think.
Both of them would be considered as "younger writers" in Iceland. As all nation we have our classical writers, like
Gu?bergur Bergsson and
Thor Vilhj?lmsson, both of whom have enoyed some international recognition. I also must mention
Einar M?r Gu?mundsson, and his masterpiece
Englar Alheimsins (Angels of the Universe), winner of the Nordic Council Literary Award in 2005. I also must point out the likes og
Vigd?s Gr?msd?ttir and
Einar K?rason.
Then there are the old masters; Nobel Prize Laurate
Halld?r Laxness and his generation. I will name just
Gunnar Gunnarsson and
Gu?mundur Kamban in that context, both of whom were also rumoured to be awarded the Nobel litarature at some point in their careers.
It might be worth mention that according to one theory it is said that Hemingway got his inspiration to write his masterpice
The Old man and the Sea, after reading Gunnarsson's
Advent.
And just to name some more contempory writers, you might be interested in
Au?ur J?nsd?ttir (grand-daughter of Halld?r Laxness),
Gu?r?n Eva M?nervud?ttir and
Andri Sn?r Magnason.
There are also two very good Icelandic crime-scene fiction writers, of
Arnaldur Indri?ason, already an internatinal success and winner of the Gold Dagger, and then there is
Yrsa Sigur?ard?ttir, well on her way to become and internatinal sucess, and in my oppinion she will be even bigger than Indri?ason.
Of course I?m only browsing through icelandic literature here, feel free to ask any questions and I will try to provide sem decent answers. Ask anything at all.
Finally, not being an native-english speaker, I appologize for any spelling errors.
And in the and, if somone is interested in reading Halld?r Laxness, I consider his book
Independent People the best book ever written.