Himininn var enn skýjaður, en við sáum regnbogann samt vel.

In Icelandic, the is usually attached to the end of the noun instead of written as a separate word.

So here:

• Himininn = the sky
• regnbogann = the rainbow

That final article changes shape depending on the noun and its grammatical case, so it will not always look exactly the same.

himinn is the basic dictionary form and means sky or heaven.

Himininn is the definite form, so it means the sky.
The capital H is only there because it starts the sentence.

This noun also changes its shape a little when inflected, so the definite form is not just a simple add-on with no other changes.

Because Icelandic nouns belong to different declension patterns, and the definite ending also changes with case.

Here:

• himininn = definite singular form of himinn
• regnbogann = accusative definite singular of regnbogi

So the endings are different for two reasons:

1. the nouns themselves decline differently
2. regnbogann is in the accusative because it is the object of the verb

If regnbogi were the subject, you would normally see regnboginn instead.

Because it is the direct object of sáum (we saw).

The verb sjá (to see) normally takes an accusative object, so:

• við sáum regnbogann = we saw the rainbow

This is a very common pattern in Icelandic: the verb determines what case its object takes.

Because it agrees with himininn in:

• gender: masculine
• number: singular
• case: nominative

So skýjaður is the masculine singular nominative form.

After the verb vera (to be), Icelandic adjectives usually agree with the subject:

• himininn var skýjaður = the sky was cloudy

If the noun were neuter or feminine, the adjective form would change.

They do different jobs:

• enn = still / yet
  It describes an ongoing state: the sky was still cloudy
• samt = nevertheless / anyway / all the same
  It shows contrast: we saw the rainbow anyway

So the sentence is built like this:

• Himininn var enn skýjaður = the sky was still cloudy
• en við sáum regnbogann samt vel = but we still/nevertheless saw the rainbow well

They are not redundant. One describes the weather continuing; the other marks the surprising contrast.

sáum is the 1st person plural past tense of sjá (to see).

So:

• sjá = to see
• sáum = we saw

This is an irregular verb, so the stem changes. It is worth learning as a pattern:

• ég sá = I saw
• við sáum = we saw

vel is an adverb, and it modifies the verb sáum.

So:

• vel = well

With a verb like see, English often prefers well or clearly, and Icelandic vel can cover that idea naturally:

• við sáum regnbogann vel = we saw the rainbow well / clearly

You would not use an adjective here, because the word is describing how we saw, not describing the rainbow itself.

Yes, samt is fairly movable, but the sentence follows a normal Icelandic main-clause pattern.

After en (but), the clause starts with við, and the finite verb sáum comes early, which is normal Icelandic word order.

This version is natural:

• en við sáum regnbogann samt vel

You could also hear or read:

• en samt sáum við regnbogann vel
• en við sáum samt regnbogann vel

The exact placement changes emphasis a little, but the basic meaning stays the same.

Here it means we.

Icelandic við can indeed also be a preposition with meanings like with / by / against / at, depending on context. But in this sentence it is clearly the pronoun:

• við sáum = we saw

So context tells you which við it is.

It can mean either, depending on context.

In this sentence, because we have weather words like skýjaður (cloudy) and regnbogann (the rainbow), the meaning is clearly sky.

So here:

• Himininn = the sky

Yes. ennþá often works in the same place and means still as well.

So this would also be natural:

• Himininn var ennþá skýjaður...

Compared with enn, ennþá can sound a little more explicit or conversational, while enn is short and very common in both speech and writing.