The best thing is, you get paid. This is rare for a GAP year. Most GAP students pay over a £1000 for as little as a month or three in some program. The wages aren't high, but they are still wages, and as an extra bonus, if you choose to work with Horses, Farming, Baby sitting or Gardening/Horticulture, after 6 months the flight one way is reimbursed, and both ways after 12 months . In Tourism, you get one way reimbursed after 6 months. If you want to work with fish, you pay for your own flights.
For most sectors, no previous experience is required, however, please note that you need 'extensive experience' with horses to get a job in the horse sector, for obvious reasons - you may have charge of tourists' lives and limbs, and if you're breaking horses they don't want you to be broken instead.
However, if the horses have made your ears prick up, you may like to know that most Icelandic farms have horses, which you would probably be allowed to ride free of charge, and that many Icelandic farms still use these as working animals. So if being paid to go on a three day horse trek into the Icelandic mountains to round up the sheep sounds like a good time, you might want to apply for farmwork.
The good thing about Ninukot is there is something for everyone, if you don't fancy the farmwork, you can work with Tourists, perhaps in the towns. Anyway, the website is: http://www.ninukot.is/
King of the cheap, ecological GAP year - Beloved of backpackers. With WWOOFing you only pay for your own transportation to and from your destination (and your souvenirs). You do between 3 and 5 hours work a day on an Organic Farm (Participating countries all over the world). In return you get your bed and board and learn new skills. Host farms vary in size from simple smallholdings to full scale commercial farms. Work varies and can include babysitting, weeding, tractor driving, and animal husbandry (etc.). See WWOOF UK at: http://www.wwoof.org/wwoof_uk/ or go direct to the list of international sites at: http://www.wwoof.org/wwoof_uk/links.html
This is a worldwide organisation you can join (for free) where members can stay on peoples spair beds, couches, or floors, for free. Designed for backpackers, the networks has various safeguards in place such as verification of personal information and vouching by established members. Set up as an online network, one can choose where one stays (or who one allows to stay with you). This is a very cheap way to get accomodation (i.e. free). You don't get food, as you do wwoofing, but you don't have to work either, and the free couch is likely to be in the town rather than the countryside. Go here: http://www.couchsurfing.com/
Check the two 'EcoHolidays' pages for other ideas: http://www.ecoknight.co.uk/ecoholidayscheapones.htm and http://www.ecoknight.co.uk/ecoholidaystheothers.htm