Are we trying to do too much touring in one day by driving from Arcos to Nerja via Zahara, Grazalema and Ronda? I am considering staying the night in Ronda but this would mean one less night at our apartment rental in Nerja which is already booked for a week. What do you think?

I don't know.
At first I was thinking it would be possible, because we drove from Ronda to Cadiz via Acros and Grazelema in one day.
We drove through Nerja on the way to Ronda from Granada. It's quite a long and winding road from Ronda down to the coast and the coastal traffic to Nerja can be very heavy.
It would be a very long day.
If you want to see my trip (albeit in reverse of your plan) it's here:
http://www.wired2theworld.com/spain2005.html

Thanks Kristina. I've read your trip report while planning my trip and it's been very helpful. I'm wondering if we should drive further the day before instead. We were going to drive to Arcos from Sevilla then the rest the next day. Originally we were going to go to Jerez but recent trip reports are not so favourable. Do you think we would be better going from Sevilla to Zahara/Grazelema then on to Nerja the next day via Ronda? Or better to go from Sevilla to Ronda via Zahara and Grazalema then on to Nerja from Ronda the next day?

I've gone back and reviewed some posts and now I think I'll skip Arcos de la Frontera and drive to Ronda via Zahara and Grazalema and then the next day on to Nerja. I hate to miss Arcos but I also don't want to spend all my time in the car. Any thoughts?

Lily-
I think your last plan there is a good one. If you can afford the time to spend the night in Ronda I think it will be worth it. Otherwise it will be just a very long day in the car.

Lily

I would stay a night in Ronda, its a tiring drive,we did it once and we were exhausted.

Thanks Kristina and lucielou. I've rebooked our hotel in Ronda instead of Arcos. I'm a slow traveller to start and so this will work out better.

I'm not sure if it will help you, but we spent a night in Benahavis, near Esteponia that was wonderful. I just posted my trip report about it a few minutes ago.