We are trying to co-ordinate our train travel at the Madrid station. The train comes in from Toledo and then another train ( the AVE) leaves to Seville 12 minutes later. I think this is cutting it way too close. How much reasonable time should we alot for between trains. We don't want to hang out at the train station all day with our bags. Help please

Definitely...
The schlep from the local trains to the AVE area is kind of long. I got to the train station 25 minutes before my AVE left for Seville and still barely made el tren!
Bueno suerte!

We had 4 minutes between trains in Lausanne, going from Paris to Venice...and we had no problem making the connection...but the station was small

How heavy is your luggage and can you move faster than "martytravels"???? Four minutes can be easily doable depending on those answers and the platforms the trains arrive/depart from...but quite honestly I don't think you're going to get a really definitive answer here..just conflicting opinions.

I have very limited experience with trains in Spain, but from what I understand they do not often stick to their schedule. So you may not get into Seville station in time to get the AVE train (which, being highspeed, is more likely to stick to the schedule, in my opinion).

The AVE trains certainly keep to their schedules: passengers' fares are refunded if the train arrives late. Unlike other trains, you have to check-in and have your luggage scanned before getting on the train. Therefore, you should book on the AVE leaving an hour later. There are cafés in Atocha station where you can while away time.

I agree with Geoff and Marty, book the next AVE. You might make it on time, the check-in and luggage scanning process is fast and happens right on the platform next to the train, but it's an added stress you probably don't need.
Also the train from Toledo -unlike the AVE- doesn't have the timeliness guarantee policy so it could have delays. I've had it happen on regional trains before, sometimes a technical problem or something like that. It is not frequent, but it happens.

Also, the luggage racks at the AVE fill up quickly. I always prefer to be a little early. Atocha station's indoor garden is a nice place to wait anyway. I recomend a drink at the Samarkanda café, up high overlooking the garden.