We stayed at Snorri's our first night (of only 4) in Iceland, at the end of Sept 2011. My first impression was not great: busy street, minimal aesthetics, small room, dis-interested front desk person. However, it turned out fine. The location, while a bit difficult logistically, being on one of the busiest streets coming into town, was quiet after 8pm, when Reykjavik turns into a small town. The reception person was quite helpful and the value (given that everything in Iceland is insanely expensive) was good. I would recommend it if you want basic quality and good value.
We loved Iceland and plan to return for a longer stay, even though Reykjavik isn't much of a draw.
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