Around year 1000, the same language, called Old Norse, was spoken in Norway and Iceland. The Norse sagas , skaldic poems, and Eddas were written in Old Norse. In Iceland, due to their geographic position as an isolated outpost, the Old Nordic language was not influenced and changed by other languages. Norway is not the only country in the world with lots of dialects or accents, nor the only one with two official languages. For a Norwegian native, it is quite easy to understand both languages, since they do not vary that much.
Most words are the same, though sometimes spelt different.
Nynorsk was created out of the rural dialects about 100 years ago. This project would not succeed, of course, since a language will follow natural laws of development and not change when ordered to. Still, the two languages are equal and all official papers exist in the two variants. Norway Info . Norwegian Words .