You are kinda of correct, valinor was on an island, more like a slap of land in a cresent moon shape. The map in which Secret Fire has shown is the lan d called valinor on the island if you go tho this link, http://www.tolkienforums.com/firstagemaps.htm, the first and second map shown show valinor, more clearly in the second.
Good link there treesofvalar. I suppose if you call Valinor an island any continent would be an island. How big does an island have to be before its no longer classed as an island?
One small correction to the previous posts. Valinor is not the whole "continent". That is Aman. Valinor is only the realm of the Valar in Aman, meaning the darker green area.