Kaffið er ekki nógu heitt.

Kaffið means the coffee.

The base noun is kaffi = coffee.
The ending -ið is the definite article attached to the noun, so Icelandic often says the coffee as one word: kaffið.

So:

• kaffi = coffee
• kaffið = the coffee

This is very common in Icelandic: instead of a separate word for the, the article is usually added to the end of the noun.

Er is the present tense, 3rd person singular form of vera, which means to be.

So here it means is.

A few forms of vera are:

• ég er = I am
• þú ert = you are
• hann/hún/það er = he/she/it is
• við erum = we are

Since kaffið is singular, er is the correct form.

Because in a normal Icelandic main clause, the finite verb usually comes early in the sentence, and ekki often comes right after that verb.

So:

• Kaffið er ekki nógu heitt.

This is the normal order.

An English speaker may expect something closer to coffee not is, but Icelandic does not work that way.
With vera, the pattern is very often:

• subject + er + ekki + rest

So:

• Hann er ekki hér. = He is not here.
• Maturinn er ekki góður. = The food is not good.

Nógu means enough or sufficiently.

In this sentence, it modifies the adjective heitt:

• nógu heitt = hot enough

So:

• ekki nógu heitt = not hot enough

It is a very common word when talking about degree:

• nógu stórt = big enough
• nógu fljótt = fast enough
• nógu vel = well enough

Here, nógu is an adverb.

It modifies heitt, which is an adjective.
So the structure is basically:

• heitt = hot
• nógu heitt = hot enough

A useful way to think about it:

• adjectives describe nouns
• adverbs modify adjectives, verbs, or other adverbs

In this sentence, nógu tells you to what degree the coffee is hot.

Because heitt is the neuter singular form of the adjective heitur = hot.

The noun kaffi is neuter singular, so the adjective has to agree with it.

The adjective forms are:

• heitur = masculine singular
• heit = feminine singular
• heitt = neuter singular

Since kaffið is neuter, you say:

• Kaffið er heitt. = The coffee is hot.

Compare:

• Súpan er heit. = The soup is hot.
  (súpa is feminine)
• Bollinn er heitur. = The cup is hot.
  (bolli is masculine)

Because heitt is being used predicatively, not directly before the noun.

In other words, the sentence is saying what the coffee is:

• Kaffið er heitt. = The coffee is hot.

That is different from putting the adjective directly before the noun:

• heitt kaffi = hot coffee

So:

• heitt kaffi = adjective directly describing the noun
• kaffið er heitt = adjective linked to the noun by vera

This is similar to English:

• hot coffee
• the coffee is hot

One extra detail: if the adjective comes before a definite noun, its form may change:

• heita kaffið = the hot coffee

That surprises many learners, so it is worth noticing.

Yes, but the meaning changes.

• Kaffið er ekki nógu heitt. = The coffee is not hot enough.
  This usually means a specific coffee you are talking about.
• Kaffi er ekki nógu heitt. = Coffee is not hot enough / Coffee isn’t hot enough.
  This sounds more general or less specific.

If you are talking about the particular cup or pot in front of you, kaffið is the natural choice.

Kaffið is in the nominative case because it is the subject of the sentence.

In a sentence with vera like this, the thing being described is usually in the nominative:

• Kaffið er heitt.

The adjective heitt also agrees with the subject.
In this particular form, the neuter singular looks the same in more than one case, so you do not see a big case difference on the surface, but the subject here is nominative.

A rough English-friendly guide would be:

KAHF-fith er EHK-ki NOH-ghu hayht

A few helpful notes:

• ð in kaffið is like the th in this
• kk in ekki often has a kind of breathy/pre-aspirated sound
• tt in heitt is also often pronounced with a pre-aspirated sound, so it can sound a bit like ht
• nógu has a soft guttural sound that English does not really have

You do not need perfect pronunciation right away, but it helps to listen to native audio because Icelandic consonants often sound different from how English speakers expect.