Volcanic activity in Iceland 

Iceland has many active volcanoes due to unique geological conditions. There are about 130 volcanic mountains, and 18 have erupted since the settlement of Iceland in 874 AD. Of these 130 volcanoes, the most active/volatile is Grímsvötn. Over the past 500 years, Iceland's volcanoes have erupted a third of the total global lava output.  Although the Laki eruption in 1783 had the largest eruption of lava in the last 500 years, the Eldgjá eruption of 934 AD and other Holocene eruptions were even larger.

The most recent volcanic eruption in Iceland was that of Eyjafjallajökull, which started on April 14, 2010. The Eyjafjallajökull eruption closely followed an eruption in Fimmvörðuháls, which had erupted on March 20, temporarily quiesced by April 12, and then erupted with a large ash plume (due to magma coming out under ice) on April 15. The ash cloud was significant enough to shut down airports across more than 20 European countries, many of which only began to reopen on April

Here is a live feed from the Iceland Volcano, Eyjafjallajokull glacier, just in case it erupts any time soon:

 

You can find accommodation or even a Hotel in a walking distance from some of the active volcanoes (see - Iceland Hotels) .  It is also a good idea to hire a car and drive closer to those volcanoes.  To drive close to some volcanoes, specially in the highlands, you need to rent a 4x4 jeep.  Many car rental services offer suitable cars, see Car rentals Iceland