I think this is a bit of a generational thing, with older people considering ij a letter, and younger don't, "younger" being under 40/50 or so. I'm approaching 40 and I was never taught to see ij as a letter, and always considered it to be the same as eu, ou, ei, and so forth: two letters that make a single sound (digraph).<p>The y doesn't occur in Dutch words, only in loanwords, and while loanwords with a y are relatively common now, I suppose most are also fairly new (as in: last 100 years or so), which would explain the generational difference.<p>I also think it's fine to just capitalize the I: Ijsland instead of IJsland. I suspect this will be the norm 50 years from now.