OK, this is not so strange if you think about it: Lords were cremated, sometimes in a boat, sometimes on a pyre. The higher the smoke rose, the closer to Valhall they were expected to start their journey to the other side. That is because warriors that died in battle were Odin and Freyas' chosen einherjar. Other people, though, were buried in the ground on behalf of Frey, so that their flesh would make the ground fertile, sort of.
That is your stereotypical explanation. Archaeologically speaking, though, I mist point out that the way in which people were buried varioed enormously depending on geography and also time. I keep saying this, but I am goign to keep saying it until it sinks in: The Scandinavian Iron Age covers 1000 years. Think how much burial customs have changed in the last 1000 years where you live, and then compare it to a country two countries away from your, geographically. Then you'll see that there is no ONE way to bury people, even today, and even among Christians. The Norse were no different. Some of them were asatruar, some were German Christians, some were Anglo-Saxon style Christians, and some I am sure were influenced by the Saami while others were probably more like Greek Orthodox Christians. There is a huge difference, so you can't really say that there was just one way of burying people. You can look to the graves in one specific area and say that this is how people were buried here at x-point in time, which is similar to, let's say, Ibn Fahadlan's account of the Rus funeral, or of Balder's funeral in the ON scriptures. That's about it. Does that make sense?
Edit: Oh, and just so there's no confusion - Rune stones were not raised over the physical bodies of the dead, like a Christian grave stone. They were raised in memory of someone that may have been buried 3000 kms away in a different country altogether, or maybe just a block down the road. They are, as some famous dude I love has said, "Runestones to my memory", not grave markers. And the vast majority of them were raised by Christians, and therefor have nothing to do with heathen burial traditions in any way shape or form.
