The Iceland hotspot is the result of a complicated plume - ridge interaction. Assuming that the position of the Iceland plume has been stationary within the Hotspot reference frame, the plume has been overridden by the North Atlantic ridge from east to west after a ridge jump between 40 and 22 Ma. The most important effect of the hotspot-ridge interaction is the extensive melt production and subsequently highly anomalous crust production. To explain about 40 km of anomalous Icelandic crust, numerical models of a variable viscosity upper mantle plume with melting, melt extraction and magmatic crust formation have been carried out. Depending on a few critical parameters such as the excess temperature of the plume or a critical melt extraction threshold, crustal production rates have been modelled, which resulted in crustal thicknesses of large variability. Other observable mantle anomalies such as electrical conductivity or seismic velocities do not seem to show comparably dramatic anomalies. Using the same dynamically consistent models and appropriate rock physics relations anomalous seismic velocities and electrical conductivities are synthesized. To impose constraints on the dynamical plume parameters this internally consistent set of synthetic observables is compared with tomographic data of the Iceland hotspot and the crustal thickness data. The most successful dynamic model has a plume excess temperature of about 135 K at 200 km depth and an extraction melt threshold of about 1%. For the plume stem water is needed to explain observed seismic anomalies. From the calculated electrical conductivities predictions for magnetotelluric transfer functions are made indicating that the plume signal should be observable only if the melt fraction is higher than 3%.