Richard A. Lovett for National Geographic News

April 22, 2008
A giant and unusual underwater volcano lies just offshore of Iceland on the Reykjanes Ridge.
The Reykjanes formation is a section of the Mid-Atlantic Ridge, which bisects the Atlantic Ocean where the North American and Eurasian tectonic plates are pulling apart.

As magma wells up from the rift between the plates, it cools to form ridges. But it doesn't generally form giant volcanoes.
That is because mid-ocean ridges are constantly pulling apart, making it harder for large volcanoes to form without
being torn asunder.

A big edifice" about 90 miles (150 kilometers) south of Iceland has been registered.
The structure has turned out to be an active volcano that rises about 3,300 feet (1,000 meters) above the surrounding
sections of the ridge, coming within 1,300 feet (400 meters) of the surface.

At its base the volcano is approximately 30 miles (50 kilometers) across. The peak contains a depression known as a caldera that is 6 miles (10 kilometers) wide. That indicates that the mountain is being fed by its own magma
http://news.nationalgeographic.com/news/2008/04/080422-iceland-volcano_2.html

According to the text in the information here, the plates drift apart with a speed of about 2 centimeters a year, so when you stand by the sign, which is on the american plate, so you move about 1 cm a year © www.vulkaner.no

Iceland is located at the junction between the Reykjanes Ridge in the south and the Kolbeinsey Ridge in the north. These ridges represent submarine segments of the mid-ocean ridge closest to Iceland. The surface expression of the plate boundary in Iceland is the narrow belts of active faulting and volcanism extending from Reykjanes in the southwest and then zigzag across Iceland before plunging back into the Arctic Ocean of Öxarfjörður in the north.

Figure 1: Iceland in a global perspective, shaded area shows the Icelandic Basalt Plateau, red points the migration of the hot spot and orange lines are the rifts, both active and inactive.

The magma production at these volcanic zones more than matches the plate movements and consequently the magma that emerges at the surface through volcanic activity accumulates in the volcanic zones, more so towards the centre than to the margins. Thus, the volcanic successions in the centre of the rifts are buried rapidly and follow a steep path when they move away from the spreading centre. The accumulation at the middle of the zones causes a downsagging of the crust, resulting in a gentle dipping of the successions formed at the margins (5-10°) towards the spreading axis. This tilt is preserved in the rock pile as it drifts out of the volcanic zones, explaining the regional dip of flanking older successions.

Figure 2: Geological map of Iceland, showing the volcanic systems, volcanic zones and the division of the island into formations.
http://www.soest.hawaii.edu/HIGP/Faculty/hey/rr2007/icelandgeo.html