For Madrid, you should have a look at the Barrio de las Letras/Litterature district (Huertas) around vibrant Plaza Santa Ana. You are then 200 meters from both majestic Plaza Mayor and the heart of Madrid Puerta del Sol. Some few minutes walking to all the major museums.

Plenty of cafés, tapas bars, restuarants and local shops here. Two of Madrid's best jazz cafés (Café Central and Populart) and four of the city's best flamenco tablaos are on your doorstep (Casa Patas, Cardamomo, Villa Rosa and Carboneras). Just five mins walk to one of the absolute best tapas bar/restaurant areas in town, in and around Calle Cava Baja.

About the area:
http://www.barrioletras.com/
http://www.gomadrid.com/sights/plaza-santa-ana.html

Plenty of hotels in all prices and categories around here. In the high end, you find places like Reina Victoria right on the Plaza Santa Ana. I use to stay in affordable and good value Persal or Hotel Plaza Mayor.
Reina Victoria: http://www.booking.com/hotel/es/madrid/melia-reina-victoria.en.html
Persal: http://www.booking.com/hotel/es/persalmadrid.en.html?dva=0
Plaza Mayor: http://www.booking.com/hotel/es/plaza-mayor.en.html

booking.com with hundrds of guest reviews from people who actually have stayed in the hotels.

In Barcelona, I like the vibrant El Born area as a base. Close to "everything". Take a look at Hotel Banys Orientals: http://www.hotelbanysorientals.com/

Both Madrid and Barcelona can rightfully boast fabulous restaurants and tapas bars, and together with San Sebastián Barcelona is the food capital of Spain. Here you also find one of the finest food markets in the world, La Boquería: http://www.boqueria.info/index.php?lang=en

I think the Barrio Santa Cruz in Seville is one of the most romantic places in Spain, never saw any place in Barcelona that came even close. That said, Barcelona has outstanding restaurants, beautiful beaches, and Gaudi; the only 3 things that has going when compared to Madrid. Not a great Barcelona fan here, specially after been robbed blind (beware) there. That said, I would say there is lot to be enjoyed in this city, which will remind you of NYC (this not very appealing to me been from NY). From Barcelona you can rent a car and take a couple of days to drive the coast up to France. Gorgeous scenery and definitely romantic. I just returned from Spain where I took a couple of days and drove to Andorra from Logroño, before returning the car and flying back from Barcelona. Pamplona is 4 hours by bus, same by train and also very, very interesting. I guess I am trying to get you to expand your horizons while in Spain and get in a couple of daytrips to some of the most exciting and beautiful cities in Europe.

I love Madrid and, to me, it is more appealing than Barcelona with its neighborhoods, plazas, tapas, theaters, and museums. I think you have time to, while staying in Madrid, day trip to Toledo and Avila. Have a great, great trip! Congrats!!

Maribel's on-line city guides offer interesting perspectives on dining http://maribelsguides.com/

Hi Knemo. We are also going to Spain late May for 8 days and thanks to the suggestions from this forum, we decided on Madrid for 4 nights and Sevilla for 3. I studied in Madrid many years ago and loved the city. I think the justaposition of Madrid and Sevilla is perfect and do think the pace of Sevilla will allow a more relaxing trip. Thanks to Susan in Toronto, we found a great apt in the area Kihhe recommended in Madrid and have a lovely private terraced apt in Sevilla. you could also base yourself in Madrid for the whole time and do a day trip to Toledo and another to Segovia. Just some ideas...

Your stay in Barcelona coincides with the city's major flamenco festival, the cutting edge Ciutat Flamenca (May 23-26). This years edition is celebrated in memory of the greatest flamenco dancer of all times, Carmen Amaya from Barcelona (1913-1963). http://mercatflors.cat/en/ciclesifestivals/ciutat-flamenco-flamenco-city-2013/

The festival takes place up in Mercat de les Flors in the theater village at the foot of the famous Montjuic hill. Only the greatest flamenco artists perform here. Mercat de les Flors is just above the small, vibrant and local feel Poble Sec district with lots of great tapas bars, restaurants and cafés (Quimet y Quimet, El Sortidor, La Perla etc. etc.).

The two last editions of the festival have included artists such as:

National Dance Prize winner 2010 Rocío Molina, according to the New York Times "one of the finest soloists in the world today" and cantaora/singer Rosario Guerrero "La Tremendita":
http://www.youtube.com/watch?v=ZYaY4zZgTas

Pastora Galván, voted best female flamenco dancer 2010 by Spanish critics: http://www.youtube.com/watch?v=k2SBUcrJgeQ

Marco Flores, most likely winner of the male dancer critics award 2012: http://www.youtube.com/watch?v=z-FVsvGBsR4

The great flamenco fusion band Las Migas with the wonderful vocal of young Alba Carmona. From 1 min - 1.30 you might get an idea of the so called "duende" in flamenco: http://www.youtube.com/watch?v=jIaxlpFQnDo

About duende; "irrationality, earthiness, a heightened awareness of death, and a dash of the diabolical": http://en.wikipedia.org/wiki/Duende_(art)

With only 7 nights I'd definately not try to add Sevilla to a mix of Madrid and Barcelona - this would be a whirlwind.

Madrid and Barcelona for 7 nights is even a little rushed. Your first day will likely be jetlagged. If you spend 4 nights in Madrid then you'd have enough time for probably one daytrip and 3 nights in Barcelona would be enough to hit the sights in Barcelona but probably no Daytrips. Or 3 nights Madrid and 4 nights in Barcelona would likely not be enough for Daytrips in Madrid but probably one in Barcelona.

If you spend the entire time in Madrid you could either spend the entire 7 nights in Madrid and do several Daytrips or even spend 5 nights in Madrid and 2 in Salamanca. With 5 nights in Madrid you'd probably also have time for a couple of Daytrips (ie. Toledo, Segovia).

Similarly if you spent the entire time in Barcelona you could spend the entire time there with many daytrip opportunities (Girona, Tarragona, Vic, Montserrat, Sitges, etc...). Or you could spend 4-5 nights in Barcelona and then overnight 2-3 nights inGirona, Tarragona, or along the coast (Cadeques, Begur, etc...).

Another option would be to visit Andalucia. You could head directly to Sevilla for 4 nights then 2 nights in Granada with your final night in Madrid. But this may be a bit rushed with 3 hotels in one week. Alternatively you could spend 6 nights in Sevilla and do several Daytrips. May is a wonderful time to visit this area. Then spend your final night in Madrid. If you could find a connecting flight from Sevilla, Granada or Malaga then this would also be an option and avoid the final night in Madrid (also making the Sevilla/Granada option more feasible).

Sounds like a great introduction to Spain to me. I have not stayed in the Mad or Bcn locations, but I like the Room Mate chain of hotels. More "mod" than historic charm, but clean and a great deal, with good breakfast.
http://www.room-matehotels.com/index.php/eng
You might want to read ekscrunchy's recent trip report about Madrid:
http://www.fodors.com/community/europe/culinary-exploring-in-madrid-sevilla-gaucin-and-malaga.cfm

Thanks everyone! I definitely want to go to Madrid but am torn when it comes to deciding between Seville or Barcelona. Which is the better destination?!

What about flying into and out of Madrid, but then heading down to Seville for a few days. Is it realistic to squeeze a trip to the Alhambra? It looks like it's 2.5 hrs by train from Madrid, but then another 4 hrs to Granada? Our trip is getting cut short down to only 6 days, so i'm feeling the squeeze on time...

The flamenco festival in Barcelona May 23-26 would without doubt have settled the question for me. A night at Mercat de les Flors with a local and knowledgeable crowd could easily be the highlight of the trip.

But Sevilla is of course a lovely and smaller city:
http://www.andalucia.com/cities/sevilla.htm
http://www.exploreseville.com/

What appealed to you about Barcelona initially? You sound like city people. You seem set on Madrid, so one thing that might help is to read a bit about Barcelona's surroundings and a bit more about Andalucia's surroundings. Then, think where you might be more likely to want to return and explore with more time. That might help you decide where to spend this short visit. I have not been to BCN yet, butt I can tell you there is enough in Andalucia to fill months, so just a taste of Sevilla may or may not make the most sense.

If you only have 6 days then I would definately settle on Madrid OR Barcelona OR Sevilla. Although I'd save Andalucia for another trip when you'd have time to fully explore.

6 days in Madrid or Barcelona will be enough to get over the jetlag and 2 a couple of daytrips. I wouldn't even try to do both in such a short time flying from San Francisco especially if you want some relaxation time versus just seeing the main sights.

I love both Barcelona and Sevilla. They are totally different from Madrid in completely different ways. Either city would be an invaluable contrast to get a feel for the diversity of Spain.

Madrid is in my opinion the most "genuine" of the three, meaning that you are seldom overwhelmed by tourists all over the place in the way you can be in both Sevilla (especially in the Santa Cruz district) and Barcelona (parts of the Gothic quarter and on Las Ramblas). The center of Madrid is more like a collection of very diverse local feel areas around grand avenues, parks and plazas. The mentioned areas in Barcelona and Sevilla are very popular with tourists for quite good reasons, but you should also visit other parts of these cities to get a taste of what they are about.

Sevilla lives in a very self-assured way up to the image of what many foreigners think of as quintessentially "Spanish". The great essayist and philosopher José Ortega y Gasset suggested more than 80 years ago that visitors to Sevilla might suspect that they are witnessing a magnificent presentation of a ballet called "Sevilla" in which most locals put in their absolute best to play their part. This still makes sense.

In stark contrast, Barcelona's history and identity is very much based on being different from Spain (read: Madrid). Barcelona is the capital of the Catalan region, and tellingly the Catalan National Day is 9/11 in memory of the date in 1714 when they finally lost their independence to the Spanish crown. In the midst of the current economical crisis, the campaigns for independence from Spain (again read: Madrid) are stronger than ever in the traditionally wealthy Catalunya.

In addition, FC Barcelona and Real Madrid are arguably currently the two best soccer teams on the planet. The matches between the two giants have been national spectacles with strong cultural and political connotations ever since the Spanish Civil War (1936-39). During the match between the two teams last October, in legendary Camp Nou in Barcelona filled to the brim with about 90 000 spectators, after 17 minutes and 14 seconds (loss of independence 1714), a chant about Catalan independence sounded around the stadium from the Barcelona fans.

<< FC Barcelona and Real Madrid are arguably currently the two best soccer teams on the planet. >>

Well, not this year for the latter. Lionel Messi and 10 wooden pylons would be a decent match for most club teams.

<<The matches between the two giants have been national spectacles with strong cultural and political connotations ever since the Spanish Civil War (1936-39).>>

Yeah, you're missing the part about how Franco treated the Catalans like something his boot scraped and how RM was his team - same reason Lazio, Mussolini's team, is hated by the communists in Italy (and there are still a good number of them).

<<Madrid is in my opinion the most "genuine" of the three, meaning that you are seldom overwhelmed by tourists all over the place>>

That makes no sense - there are tourists flocking to Madrid and they aggregate in the Plaza Mayor, Plaza del Sol and the major museums. Barcelona has tons of tourists, but Gaudi made it his architectural playground so it certainly has its attractions and for good reason.

<<Sevilla lives in a very self-assured way up to the image of what many foreigners think of as quintessentially "Spanish". >>

Read The Fencing Master by Perez-Reverte - takes place in Seville and is a fantastic book.