The posters began appearing in Reykjavik clubs last Saturday, the final night of Iceland Airwaves '06: "Sykurmolarnir, 17.11." The name is Icelandic for the Sugarcubes, and the date, November 17th, is when this country's most famous rock band reunites for a concert here -- the Sugarcubes' first since elfin singer Björk left for even bigger solo success in 1992. (Icelanders are more practical than nostalgic; the show is a benefit for the group's long-running music and publishing cooperative Smekkleysa -- which means "Bad Taste.")

In their absence, the Sugarcubes have been the elephant in the room whenever another Icelandic band takes a stage, anywhere -- the premier measure of how the singular pop music of this arctic island can resonate everywhere else. Iceland Airwaves, in turn, is a proudly international event. Produced by the Reykjavik concert promotion firm Mr. Destiny, Iceland Airwaves -- which celebrated its seventh birthday this year over four nights, October 18th-21st -- is sponsored by the Reykjavik city council and the national airline, Icelandair, which offers travel-and-admission packages to foreign visitors. Of the 3,000 fans with wristbands this year (approximately $95, good for the entire festival), a third came from abroad. And of the more than 160 acts that performed, thirty-eight flew in to play, including the Kaiser Chiefs from England, Canada's Wolf Parade and, all the way from Omaha, Nebraska, Tilly and the Wall. (Total attendance, including press and industry folks, was 4,200 -- down from 4,800 in 2005 but intentionally reduced by the promoters to avoid the long lines that plagued some Airwaves venues last year.)

Yet Iceland Airwaves is also a profoundly regional party. Icelandic bands mostly sang in English, but their stage banter and inside jokes are all in the home tongue, a complex language that is the closest, in all of Scandanavia, to ancient Viking speech. And all of my highlights this year came from Icelandic bands of friends and neighbors received with concentration and cheers by crowds mostly made up of more friends and neighbors. A few examples: Skakkamanage, originally a naïve-pop trio, now a bigger band with a better grip on its Belle and Sebastian ambitions; Dikta, a pomp-rock quartet that ended its set with a Nirvana-like blowout, "Chloë," from its latest Smekkleysa album, Hunting for Happiness; the electro-hip-hop duo Ghostdigital featuring ex-Sugarcube vocalist Einar Örn, whose raw bark and fighting rhyme go way back, beyond Public Enemy to the Seventies anarcho-punk of Crass and the early Fall.

Iceland Airwaves is also the only rock festival I have ever attended that comes with its own light show. On Friday, as I commuted between clubs with a friend, I walked into a downtown square, was told to look up -- and saw the aurora borealis, which moved through the clear black sky in broad, slow iridescent swirls.

Back on earth, the best band I saw at Airwaves '05 -- the six high-school hellions of Jakobínarina -- were even better this year. At the Reykjavik Art Museum, the band tore through the hyper-pop punk of "Sleeping in Seattle" and "His Lyrics Are Dangerous" with a tightened bravado reflecting the lessons and adventures of their last twelve months, which have included recording sessions with Sigur Rós producer Ken Thomas for an album coming on Rough Trade. One new number was practically a mini-opera, a series of hairpin turns into speeding hooks and choruses climaxing with a locker-room-warrior chant that the bass guitarist later told me was "our idea of the Beach Boys."