Hopefully Madridman won't object to me putting this up here. I bought a phone for a trip to Spain and it worked great. It is already unlocked and set to the correct Spanish frequency. All you would need to do is purchase a sim card from one of the Spanish companies and stick it in. I used movistar but there are some other choices. The phone isn't particularly fancy but it was really nice for my family to have a way to get in touch with me for the 6 weeks I was there and also to keep in contact with people I met along the way. I have it posted on Ebay right now and similar phones have gone for about 20 bucks. It would probably be cheaper than renting a phone. I would be glad to answer any questions about how it works over there as well.
Here is the link, thanks! http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=3089716269&category=64355&sspagename=STRK%3AMESSE%3AIT&rd=1