They're not lying to you, during the holidays the trains DO tend to sell out! You may be lucky and get standing room only, but after a trip like that, I wouldn't risk it!
Keep in mind that trains and buses are much more common to use in Europe than in the States. I have friends who live in Cartagena (southeastern Spain) and who use the trains often and if they're going home for the holidays, believe me, they run out and get their tickets! EVERYTHING gets booked, and overbooked!
As far as how much they're charging you... do you know anyone there that could purchase the tickets for you and meet you when you arrive in Madrid and give them to you? Have you tried doing it with a credit card right through Renfe?
And yes, normally during any other time of the year (again, except on a holiday) usually the day in advance ticket would more than likely be fine. Which again, is not your case this time.
Shazz, Just checked out.
Good news!
Directly from the Renfe site, you should be able to purchase your tickets, and pick them up at the Renfe station when you get there.
They have recently set up something called TIKNET (or something like that) its to order your tickets via internet. You have to set up a client number, and then with a credit card they'll hold your ticket
You just have to remember to bring the same credit card with you so it can be swiped when you pick up your tickets.
They have a secure website, but if you're still worried about using your credit card (they do not accept virtual cards-if you don't know what that is, ignore it and keep reading) I suggest you get a card and lower the limit. I have a card I did this with to use only for the internet, the limit is so low that if anyone does anything funny with it, I'll not only notice it right away, but it won't hurt me-or the credit card co. either for that matter!
If your Spanish isn't that good, send me a PM and I'll send you my phone number, I'll get on the page at the same time as you and I'll walk you through it (you of course entering the information- I don't need that, I'll just tell you where you have to do it!). That should help you save the extra cash!