Pros
Talented, passionate people working there. Easy to make great friends. Fantastic folks to work with.
A real love for making games that people want to play.
Even when laying employees off, they provided a great deal of support in the process: HR went above and beyond to help place former employees where they could.
Pay wasn't super-competitive, but benefits like the cantina are incredible.
Cons
Not enough trust given to the American employees. We had veterans who'd been in the field for a decade or more being told their experience didn't mean anything; they had to do things in accordance with the Reykjavik way. There was a distinct feeling of the Old Boys Club.
Difficult to advance internally. Some positions had no job descriptions attached to them -- nothing outlining their responsibilities and skillsets -- for years.
Management had difficulty accepting the possibility they might be wrong. The most heartfelt admission of making mistakes happened only when 20% of the company had to be let go. By then, it was too late.