Perlan ('The Pearl' in English) is a spectacular landmark which overlooks Reykjavik and can be seen for miles around. Dating from 1991, it is actually a water storage facility (for the geothermal water that comes out of the earth here and supplies the city with its hot water) with a viewing platform, a cafeteria and a revolving restaurant on top. Inside there is a large space which is often used for concerts. Perlan also houses the Viking Saga Museum which is open everyday.
For families, the cafeteria is inexpensive and very family-friendly and has a great view of the city but if you're looking for something special, the revolving restaurant is more upmarket and has exceptional views over Reykjavik. it takes about two hours for one rotation. Finish your meal with a taste of the local spirits in the bar.
The Pearl is easy to reach by public transport and most sightseeing tours of the city also end up here.
