The Elder Futhark has a distinct character *wunjô which represents /w/, and another *ûruz which represents /u/ (short) and /u:/ (long). But, as I mentioned [ http://tech.groups.yahoo.com/group/norse_course/message/10141 ], the old symbol for /w/ became superfluous due to changes in the language at the beginning of the Viking Age. At around the same time, there was a change in the writing system, and most inscriptions came to be written in a form of the runic alphabet that we call the Younger Futhark. The w-rune fell out of use. One reason, besides the general tendency to reduce the number of letters, may have been that the sound /w/ disappeared wherever it had originally occured before /u/, thus, for example, Ancient Nordic 'wulfaz' became Old Norse 'ulfr' (later, c. 1200, in Icelandic 'úlfr'). This meant that the sequence /w/ + /u/ no longer existed in the language, so there was less ambiguity in using the u-rune both for the vowels /u/ and /u:/, and for the semivowel /w/. If vowel length and nasality had been marked, as the First Grammarian advised, and words consistently separated, it would have been possible to use one symbol for [u] and [w] with little or no ambiguity.

When Old Norse came to be written in the Roman alphabet, which also didn't originally distinguish between [u] and [w], the scribes varied their practice, mostly using 'u' and 'v' interchangeably, and rarely marking long vowels in a consistent way. In Modern Icelandic, and the modern standardized Old Norse authography, they've been given distinct functions, 'u' for the vowel, Modern Icelandic [y], Old Norse [u], 'v' for the consonant, Modern Icelandic [v], early Old Norse [w]. At no time was there a phonemic distinction between [w] and [v], so there was never a need for separate letters for these as in English. The other source of Modern Icelandic [v] was the phoneme /f/ which was realised as [v] (or originally probably a voiced bilabial fricative) in non-initial positions, except when it occured next to a voiceless consonant. It's still written 'f', e.g. 'hafa' "to have".

Stefán Karlsson wrote: "Some of the earliest scribes used 'u' and 'v' in more or less the same way as Modern Icelandic, which prescribes the use of 'u' and a vowel, 'v' as a consonant. Others followed the modern rule only when thee sounds occurred initially. Most scribes used the two characters indescriminately, whether vocalic or semivocalic, but some adopted one or the other throughout their writing. Where 'f' was most commonly written in medial and inetrvocalic positions (as in Modern Icelandic), this too may be represented in some early scripts by 'u' or 'v', e.g. 'haua', 'hava' for usual 'hafa' "to have". Many 14th century scribes adopted the practice of writing 'v' (sometimes 'w') at the beginning of a word and 'u' in the body or at the end of a word, whether the sound denoted was 'u', 'ú' or 'v'" (The Icelandic Language 2004, p. 42).

As for double letters, runic writers in the Viking Age had a tendency in the opposite direction: towards haplography [ http://en.wikipedia.org/wiki/Haplography ], sometimes even writing a single letter where the same rune would have occured at the end of one word and the beginning of the next.