@ Sean Timarco Baggaley
'Iceland generates more electricity than it can possibly use using geothermal;'
Actually most Icelandic power comes from hydro power; only about 25% is geothermal. But you're right, they have stupid amounts of power to tap and it is insanely cheap (the average Reykjaviker pays about 1/4 as much as a Britain for all the electricity and hot water they can possibly use).
The Icelandic government in association with Shell and Norsk Hydro already done extensive trials of running buses on hydrogen in Reykjavik, but have decided not to proceed further. Instead they are switching to biogas from sewage - you can recognise the biogas buses by their green roofs. The hydrogen filling station is still visible on Miklabraut as you leave the city for Hveragerði (if you're going that way, do stop off en-route at the entirely awesome geothermal plant at Hellisheiðivirkjun - it's like an Apple store has been dropped on the Moon)
There were plans to start experimenting with converting the Icelandic fishing fleet to hydrogen, but AFAIK they have been put on hold thanks to a few Icelandic billionaires running off with everyone's money.
A more economic prospect for Iceland would be to string a DC cable to the UK and pump their cheap electricity into the National Grid. The current plan by the main power company is to start offering cheap power to companies wanting to run server farms and manufacture solar silicon and to diversify away from the country's dependence on aluminium smelting which has got a bad environmental reputation of late.