I often read that people got great deals for the AVE trains for travelling within Spain. I have been checking for a week now (for MAD>Seville and Seville>BCN) and the prices seem high (and much more than flights).
http://www.renfe.com/EN/viajeros/index.html

For those who have gotten good deals for the AVE trains, perhaps I can ask some questions
How advance do you make the bookings?
Where do you get the promo code? Is it available for everyone oneline (the promo prices are what listed on the site)?

62 days ahead.

Having been to Spain several times, here is what I suggest.

Madrid is extremely charming but I think its charms reveal itself more slowly than Sevilla. Since you don't have tons of time, I might do the following instead:

Since you arrive in Madrid at the crack of dawn (I have taken this flight!), I might spend the first day wandering around checking out the highlights of Madrid then on the morning of the second, check your luggage in the station, pack an overnight bag, and take the local train (very frequent, fast, 10 euros) to Toledo and spend the day and night there. Toledo is so different at night than during the day and I am really glad we stayed the night there. Saturday night was extremely festive.

You will have to backtrack a bit but next, take the train from Toledo to Madrid and then take the train from Madrid to Sevilla. Spend at least two days in Sevilla and maybe take the local trains/buses one day to the white villages or the sherry villages. My favorite sherry village is Sanlucar de Barrameda - the manzanilla tastes different there than anywhere else in the world, the seafood is sublime, and everything is very affordable. As for a hotel in Sevilla, I suggest Hotel Amadeus. Very unique & charming property.

Then, in the morning, I would take the train from Sevilla to Cordoba. Check your bags at the station and head over to the mosque (Mezquita). The mosque is a must see (I am not a museum lover by any means but I have been to the mosque twice and was not bored for a minute bored). The mosque takes about three or four hours to see. The jewish quarter is a great place for a late lunch and then you can collect your bags and take the train to Barcelona.

Barcelona is a gorgeous city to get lost in and you will love it! I have been there three times and usually spend about 3 days there. We don't like museums either but were enthralled by The Museum of the History of the City of Barcelona. I stayed at the BHotel in Barcelona in April 2009 and found it very stylish, affordable, and well located (right in the Placa Espanya and across the street from the airport bus.

Maribel is OK. She gives you the same advice that is in the guidebooks. I emailed her once about getting some train info and she just sent me to renfe and directed me how to buy full price tickets. Later, I did some fooling around on Renfe's spanish website and booked all sorts of crazy deays (like the AVE from Madrid to Sevilla for 30 euros, a night train from Logrono to Barcelona for 19 euros).

Anyway, that's my 2 cents. I am in my 30s and I did a version of this last April. It's a good mix of cities and culture and trains are fast so you won't be spending half your time on a train!

Oh, if you are brave, you can also do the "ultima hora" (last minutes) train ticket - exactly 24 hours before the scheduled departure, you can score 50% train tickets. You just need to log into to renfe 24 hours beforehand and grab 'em! We got 26 euro tickets fro Madrid to Logrono and half price AVE tickets this way.

I have taken the night train from Cordoba to Barcelona before. It is very comfortable. Cheap tickets are available approximately 2 months in advance but you gotta snap 'em up!

We got great food in Cordoba. I recommend the Bodegas Mezquita in particular. Cordoba also has a really neat little museum celebrating Andalusian patios http://www.cordoba24.info/english/html/museen.html. Just around the corner from that museum is a statute of Manolete, the famous bullfighter.

I would skip Barcelona and focus on Madrid, toledo or Segovia, Seville, Granada and Cadiz or Malaga.

After reading all the good suggestions...we have decided on the following itinerary (to include Toledo day-tripper and possibly Cordoba):
Fri: arr in Madrid at noon (which gives us almost 1/2 day to explore the nearby areas)
Sat: MAD
Sun: MAD – (With most of things are closed on Sunday) Is it a good idea to go to Toledo (as day trip) on a Sunday?
Mon (Nov 1: All Saints Day) : I'm thinking of taking the train in early evening from MAD to Seville (which gives us the morning time to explore more of Madrid)
Tues: Seville
Wed: Seville
Thurs: Still 50-50 on this...which should we do?
The options are: 1). Should we head straight to Barcelona? OR 2). Leave Seville in the AM and take the train over to Cordoba, drop off bags at the station, linger around the mosque and take the train to Barcelona in the pm….
The flight option seems to be cheaper than trains, but if Cordoba is a must-see, we don’t mind spending a little extra to make a stop there.
Fri: BCN
Sat: BCN
Sun: BCN
Mon: BCN -- Shopping day
Tues > heading home (in the AM)

Pls give your inputs:
Toledo on a Sunday -- Yes/No?
Should we stop over in Cordoba on the way to BCN?

TIA!

I like your plan. I am not sure Toledo on All Saints Day is a great idea - museums might be closed. Maybe go to Toledo on Saturday? Do stop in Cordoba. I think it's underrated. I think 3 days in Barcelona is plenty by the way. You might add an extra day somewhere else.