Old Icelandic and Old Norse were once the same language. Old Icelandic –which survived to this day as Icelandic– was a dialect to Old Norse, and together they have formed the Old West Norse dialect of Old Norse. Although the system of modern Icelandic is basically the same, it underwent quite some changes during the past seven centuries. The most notable change is maybe the insertion of ‘u’ before ‘r’ in many occasions. These orthographical changes can often be easily adapted to: hestr->hestur and maðr->maður. The Old Norse name Baldr becomes Baldur in modern Icelandic. Phonologically there have been big developments over the past seven centuries. Dipthongs are now pronounced differently.
source
wikipedia.org &
ethnologue.com