I have written about the wonderful waterfalls of Iceland before and I cannot recommend a visit to them highly enough. As well as Gullfoss, Seljalandsfoss and Gljúfrabúi we also stopped at Skógafoss on the south coast.
Here it is possible to walk right up to the base of the falls, through the clouds of spray, and also to climb to the top, up a steep set of steps in the cliff side. The scale is hard to comprehend and almost impossible to capture on camera.
Skógafoss is the start, or end, of a multi-day hike to Landmannalaugar, but it is possible to do just a short part of the route and head back the way you came in a day. This takes you high in to the mountains, following the river towards its glacial source and passed a number of smaller falls.
If you’ve not had your fill of water, you might want to consider combining a trip to the falls with a visit to Seljavallalaug hot pool, just to the west, and also free.
For more things to do for free in Iceland, see here