There was quite a lot of contact. Many Norse ended up in Iceland because they ran afoul of a King of Norway, or Earl in the Orkneys.

The best source for contacts across the N Atlantic is the Icelandic sagas. Many characters such as Njal and Egil, live in Iceland, but are often in Norway or farther afield. Egil raids the coasts of the Baltic. Often they are seen supporting one Norwegian King or another.

The Orkneyinga Saga goes even farther when talking about Earl Thorfinn. He was the Earl of Orkney, but was constantly dealing in both Scottish and Norwegian politics. The sagas are well worth reading, and are available free online.

This is a little after the 11th century, but 13th century in Iceland is known as the Age of Sturlungs, named after the Icelandic chieftain Sturla Þórðarsson (Hvamm-Sturla), and his descendants the Sturlungs. The Age of Sturlungs was essentially a brutal civil war period, fuelled by a series of intense interfamilial feuds. It featured the first and only naval battle off the coast of Iceland (Flóabardagi), as well as the largest and deadliest battle in the history of Iceland (Haugsnesbardagi, 1000 participants, over 100 dead).

To make a very long and complicated story short, the start of the period is often dated to the return of Snorri Sturluson (one of Hvamm-Sturla's sons and the author of Heimskringla and the Prose Edda) in 1220 to Iceland from Norway with the intent of bringing Iceland under the dominion of the Norwegian king. Forty years later, after dozens of battles, and hundreds of dead Icelanders, Iceland entered a personal union with the Norwegian king which lasted for almost 700 years, when Iceland gained independence from Denmark (which had acquired Iceland via the Kalmar Union) in 1944.

So a 13th century Icelandic farmer would not only be intensely interested in the affairs of the Norwegian king, he would very likely have a personal stake in those affairs, and know a great deal of people who were killed or otherwise harmed during this time period.

One of the most interesting anecdotes that illustrates just how interconnected the world (not just the Norse world) was during this time is the story of Sturla Sighvatsson (one of the grandsons of Hvamm-Sturla and Snorri's nephew). To amend for his poor treatment of bishop Guðmundur Arason (which occurred while Sturla was avenging for his brother's death by the bishop's men), he made a pilgrimage to Rome, where he confessed his sins and performed self-flagellation in the head churches. On his way back to Iceland, he stopped by in Norway and agreed to resume his uncle's (Snorri's) task of bringing Iceland under Norwegian rule.

As a side note, this is also the time period when most of the Icelandic sagas are being written, and better informed people than I could probably tell you what the impact of such a politically turbulent period was on the sagas.