Selfoss is the largest town in South Iceland.
Selfoss is rarely seen as a tourist destination in its own right. Although it sits by a beautiful spot by the Ölfusá river, it's simply too close to places like Þingvellir and Gullfoss and Geysir to be noticed, and too close to Reykjavík for most people to think of it as a place to stay the night.
The town is young, even by Icelandic standards. Its history starts out of nothing in the early 20th century, when a new bridge was built across Ölfusá. When several important companies were placed close to the bridge (it made sense, economically) the town grew into an important hub for the agricultural area that surrounds it and today it produces most of the dairy products consumed in South, West and Southwest Iceland.
Culturally, Selfoss is in Iceland connected to what could be called the Icelandic equivilent of the British chav. The Icelandic word is hnakki, which means the back of the neck. There is definitely some truth in this, and Selfoss has been home to some of the most iconic bands identified with hnakki-music. But there is much more to the town, and it is maybe unfairly judged. Being the largest town in South Iceland (with a population just under 7,000) and the main hub of an important agricultural area, it also plays an important role in the wider regional culture. Selfoss remains an undiscovered destination and its main appeal really lies in the surrounding areas, but it's a friendly enough town and can be a nice place to stay.
Selfoss sits on the Ring Road, about 60 km east of Reykjavík. It's also well connected by roads to the towns on the south coast and to Upcountry Árnessýsla.
The Reykjavík bus system, Strætó , runs buses to Selfoss. The route is number 51 and buses leave from Mjódd interchange station in Reykjavík, goes through Hveragerði and terminates at Fossnesti in Selfoss. One ride between Reykjavík and Selfoss costs 1,400 kr. and buses leave close to once every hour during weekdays, less frequently on weekends.
Finally, it should also be mentioned that many Golden Circle buses run through Selfoss.
As with most Icelandic towns, it's easy enough to get around by walking. The aforementioned bus to the towns on the south coast has a few stops in Selfoss, so it's possible to use it to get around town but you'll probably spend so long waiting that it won't be worth it.
The local taxi company is called Bifreiðastöð Árborgar, their number is +354 482 3800 and they have a taxi rank on Eyrarvegur outside the building which houses Hótel Selfoss and the cinema.
Getting out of Selfoss is really one of the main reasons for staying there. While to town itself may not be too interesting, it's close to the coastal towns Eyrarbakki, Stokkseyri and Þorlákshöfn, to the rural heartland and tourism hotspot of Upcountry Árnessýsla (location of Gullfoss and Geysir), to Þingvellir National Park and and of course the capital Reykjavík. If you have a car, each of these can be very nice destinations for day trips.