Funny that — I have the same dictionary (the 2008 edition) on my shelf right now, just an arm's reach away. I never knew TeX was used to produce it, though — isn't that neat?
The article also mentions that it's not the first Icelandic published book produced using TeX; that honor goes to Bókin um Macintosh, written by the same author and published in 1987. I doubt that this one has aged as well as the orðsifjabók (a 1987 book on Apple computers is going to be of limited interest at best today), but it's a fascinating bit of history.
EDIT: for another interesting article on TeX being used for Icelandic works, see TUGboat 54 (1997), specifically A Medieval Icelandic manuscript: The making of a diplomatic edition by Andrea de Leeuw van Weenen.