We did the encounter last April on the Dream. I believe you have to meet at the time of your excursion (i.e. you can't go early.) It may be something about space on the boat - you are going over on the same boat at the same time with the people booked on the Blue Lagoon Beach Day and Blue Lagoon Dolphin Swim, so it is not just your group. Definitely get the earliest time you can.
As an aside, when it was our time to book excursions online, the Dolphin Swim for the earlier time was sold out. We had no idea what the times were prior to the time we got on the computer. So, we ended up doing the earliest Dolphin encounter, and I believe it was at 9 something. We met in the theatre, and then we all walked out of the ship and then like 20 yards to the dock where the ship picked us up (but please note the ship does not return you to the same spot! It will return you much further away, so you will have to walk through a 2 block shopping mall to return to the ship, so be prepared to walk this far after a day at the beach.)
When we got to Blue Lagoon (and we were doing our pre-encounter "talk" by the guides, they had spaces open for the Dolphin Swim, so my husband and son went off and did that. They loved it.) So, if you have any who are interested in the swim, know that there may be an opportunity once you get there. It is just on the other side of the huts, so it is not far. The area is private and it seems like there are no outsiders/locals there, so we felt completely and 100% safe.
My daughter and I did the encounter, and we loved it as well. It was perfect for us. I highly recommend betting the Sony Cybershot waterproof/freeze proof/sand proof/ drop proof camera. We got the TX10 one in bright green and got AMAZING pictures of the dolphins. It also takes HD video - Note - they don't like for you to take pictures because they have their own cameras, but they didn't stop us becuase I think they didn't know that our little bitty camera took as good of pictures as it did! It's around $300 and worth every penny. BTW, also get a flotation strap with it - we got one for $7 and it has been amazing. We bought both on
Amazon.
After we finished our dolphin encounters/swims, we met up at the beach area. LOVED IT. Had a fabulous time at this beautiful, serene beach. We grabbed chairs and I dare say that we enjoyed this more than Castaway Cay! (heresy, I know!) Seriously - it wasn't nearly as crowded as Castaway, and the waves were nonexistent - this made for great playing in the sand for our young kids. They had inflatables in the water that the older kids could use for free, and it was a safe, no-shark area that was well patrolled by lifeguards. The only thing that wasn't as good or better than Castaway was the food - the food is RIDICULOUSLY expensive (we're taking $8 for a hot dog, $2 for a bag of chips, $3 for a can of coke) So be sure to order "room service" of those PBJ sandwiches and any kind of portable drink and throw them in your bag.
We took one of the last boats back around 4:00 p.m., and we were able to get ready and make our early dinner seating time.
All in all, I loved our day at Blue Lagoon and wouldn't hesitate to recommend it to anyone with elementary age kids or younger. It blew the doors off of our experience a couple of years ago doing the Atlantis beach day.