You might want to read my trip report although the trip was shorter than what you are planning; click on my name to find it.

Also check Jamikins Portugal trip report to get some initial ideas.

What method of transport are you going to use and what is your port (airport) of entry and exit?
Both countries has loads of what you are looking for so no matter where you go you will not be disappointed.

Thanks all - haven't made any decisions about entry /exit points yet. Need to find out if a car can be picked up in one location and dropped at another. Am thinking of hiring a car for easy access to areas. My partner is 72 and I'm 62 hence the idea of basing for a week at a time and branching out on day trips. Have bought the Lonely Planets for both countries but there's nothing better than other people's experiences to help in the planning.

I'm also interested on cooking schools while in both countries - can anyone advise please.

With regard to Portugal, I would suggest Lisbon as your main base but with this much time, you could spend a week south in the Algarve and a week north in Porto as well. With two weeks in Lisbon, you can easily take day trips to Cascais, Obidos etc and 2-3 days in Sintra. You can either use a car or take the train.

Driving in cities is not for the faint hearted. So I would suggest take public transport if you are only heading for cities.
Having read LP what takes your fancy. There are a million things you can see as Spain is a large country, then add Portugal into the equation and.....
If you hire a car in one country and drop off in another you will face huge drop off fees. Best to hire a car in one country and drop off in the same country. There normally are no fees associated with this plan.

You can also click on my name to read my trip report from October 2010 to get some ideas. We spent 5 days in Barcelona & then did a 3 night/4 day driving trip through Costa Brava, Girona & the Pyrenees. Costa Brava & Pyrenees would give you the small towns & countryside you are looking for. In the Cadaques/Figueres area, you can visit Dali's home, museum, etc. for the art you enjoy. Perhaps 3 areas to use as home bases in Spain could be Andalusia, Madrid & Barcelona.