Dear mdenil and curtvprice, thank you your answers.
Mdenil: you solution solution works. Bellow I include the streamlined procedure:
1) Dissolve all small area features with the "single part" option ( create a field that is constant for all features (aux1=1) and useit as the dissolve_field)
2) In "edit map", manually delete the mainland part. This will create a the "Islands" shapefile.
3) Do a "select by location" based on the original file, selecting the features that "intersect" with the "Islands" shapefile. Now you have a selection of the islands knowing the small area code for each island.
4) Create a field equal to one for the selected features, and zero otherwise. (I actually did not know how to to that, so I exported the selection as shapefile "island2" and then merged (joined) that to the original file based on the small area code).
Curtvprice: this would not work as there are some mainland small areas that are smaller than the islands.
Once again thank you very much for the help.
regards
Lucas