One of the reasons why I chose a .is domain for my personal blog. A few gotchas though: registering a .is domain takes a while (think days/weeks instead of minutes) and your TTL needs to be high. http://fr.anc.is
The only gotcha I would mention if you go through isnic is that you need to have your own DNS servers, and they have to be registered with ISNIC with a NIC handle (and some other things?). I just use Linode's DNS servers (where I host it), and haven't had any issues.
http://en.wikipedia.org/wiki/Time_to_live#DNS_records
Iceland's servers have to host the records, so low TTLs would increase their traffic and therefore load.
And now, maybe today, ChuckN will read your comment, the first person to acknowledge him after so long, and he will playback the last 2 years of his HN involvement in a montage in his head as all of the pieces start to come together ... why does no one respond to my comments? why do my comments always get downvoted? could it be true? am I really... dead?
This is quite a remarkable story actually.