If you are a foreigner it's likely that drunk Icelanders will wave scary alien things at you and dare you to have a bite.
If you are ever caught in this situation, here is a brief guide to the things they will be waving at you:
"Burned" sheep-heads, Svid:
Stuff that most people associate with devil-worship. They are boiled, singed untill the skin is brown and usually split down the middle in order to remove the brain. Despite the rather gruesome appearance, those taste quite good, kind of like boiled meat.
Even though they look quite serene and peaceful, some people can't stand the thought of eating a burned head. Many people eat only the lower jaw and the tongue to avoid "eye contact".
As long as anyone can remember, Icelandic children have then used the lower jawbones as playthings, usually pretending that it was lifestock such as sheep, but after the 1940's the jawbone became a gun in children's games as cowboys and indians became popular. Today the jawbone has been replaced by videogames.
Served cold or hot.
Rotted Shark, Hakarl:
Tastes like a combination of dodgy fish and strong french cheese with a hint of ammonia.
This is without a doubt the most pungent and dubious thing at the table. If you are new to shark and are offered some, it is wise to take the darkest piece you see (the lighter the color, the stronger the taste).
The shark is prepared by burying it in sand for about six months.
Served cold in little pieces, be careful not to eat too much as it can result in diahorrea.
Do not attempt to prepare rotted shark at home! If you do it wrong or don't leave it in the ground for long enough, it's quite likely that you will die in agony from eating it as it is full of neurotoxins and ammonia, which are filtered out using the process described above.
Haggis, blood pudding, Slatur:
Similar to the Scottish haggis, only this comes in two varieties: The black, which is made from blood, and the white, which is made from livers. Sometimes the slatur has been made sour with milk. Sometimes you'll find that some sadist has put raisins in it. You may spot an old person putting sugar on it before eating it, this is not recommended.
Served cold or hot.
Sour Ram's testicles, Hrutspungar:
Ram's testicles, made sour in milk. The testicles are put in gelatin, then baked into a kind of paté that tastes sour and spongy.
Smoked lamb, Hangikjot:
Salty, smoky, very good. This is also the traditional dish served at christmas. Usually the most popular dish among the Icelanders. Sometimes you'll find bits of string in the meat, those are tied around the meat to compress it and hold it together as it is being smoked, those are not eaten.
Served cold or hot.
Sour lamb, Lundabaggar:
This has been made sour in mysa (a kind of milk), rolled up into little bundles and held together with string. Very fatty, it may be a good idea to cut away the fat before eating as sour fat usually tastes bad, but it won't leave you with much meat on your plate.
Sour seal flippers, Selshreyfar:
The flippers of those adorable animals, made sour in milk and salted. They taste sour, salty and slimy.
Sheep-head jam, svidasulta:
Sheep heads that have been boiled, singed, cut up into little pieces, put in gelatin and baked into a paté. Served cold.
Sour Whale-fat, Hvalrengi:
Made sour with milk. Tastes like sour paper maché, probably not very healthy, and doesn't taste very good either. Served cold.
Marinated Herring, Sild:
Herring marinated in vinegar, mustard or tomato sauce with some onions, pepper and spices added. Usually eaten on rye bread (rugbraud).
Rye bread, Rugbraud:
Tastes good, makes you fart (sometimes referred to as "Thunder" by Icelanders).
Usually served cold.
Dried fish, Hardfiskur:
Tastes good, very dry. Sometimes people put butter on it like bread. This item is quite popular in Iceland as a snack. It is wind dried and you may spot racks of fish hanging to dry around Icelandic seaside towns. There are two varieties, haddock and cod.
Salted meat, Saltkjot:
Very good, salty. The meat is boiled and buried in salt for a long period of time, untill it turns red. It is a good idea to eat this meat in moderation, as over indulgence may result in swollen fingers and rapid heartbeat.
Served hot, often served with pea-soup.
Rotted stingray, Kæst skata:
Made in the same way as the shark, but not as pungent and offensive to the smell as the rotted shark. It has a strong smell of ammonia about it. Sometimes it mashed, then it is called "skotustappa".
Usually eaten as a main course, with potatoes. This is also the dish that is traditionally eaten the day before Christmas, Thorlaksmessa. Usually served hot, but sometimes served cold.
Mashed rutabagas, Rofustappa:
Boiled and mashed rutabagas, eaten with every item above. Sometimes they will not be mashed and then they are eaten like potatoes with other food. Served cold or hot.