Old Scandinavian developed out of Proto-Germanic, possibly via an intermediate stage scholars call Proto-Norse. There were two main mutually-intelligible divisions, caused mostly by geography:

• Old East Scandinavian was the dialect spoken in what is today Sweden, Denmark, Gotland, in some areas around the Baltic Sea, and for a time in Dane-occupied England (the Danelaw).
• Old West Scandinavian was spoken in Norway, Iceland, the Faroe Islands, Greenland, and in Viking-occupied areas of Ireland, Scotland, and northern England.

The term Old Norse is used most properly to refer to Old West Scandinavian (that dialect spoken by the Norsemen, or Norwegians and their settlements). However it can also be used to mean simply all of Old Scandinavian.

By far the vast majority of literature in Old Scandinavian was written in Iceland. With its many exciting sagas, and various types of poetry, Old Norse is first among old Germanic languages for quantity of literature, with Old English being a strong second.

While the dialects of Old Scandinavian have changed quite a bit into the modern languages of Norwegian, Swedish, Danish, etc., Old Norse changed very little in the mouths of Icelanders--just some slight changes in pronunciation more than anything else. To this day, the language of Icelandic is close enough to Old Norse that Icelanders can read the old sagas (written a millennium ago) with as much ease as we read Shakespeare today.