JennyB, If you do a search (upper right hand corner when you are facing your computer screen)under Hostel and the name of the city (Madrid / Sevilla, etc) you will find a number of recommendations and comments both pro and con various hostels plus prices, etc.
Whenever possible people have included links to web sites if available.

How to get Barcelona from Madrid:

As High Speed Train will not be ready till 2004, the fastest way is plane (one hour flight, departures each 30 minutes more or less).

Bullfighting season is over in october. And for flamenco shows I'd prefered Seville because of the Andalucian atmosphere.

Forget Canary Islands in a 7 days trip, but if your looking in the future for best beaches in an European country, go there.

Morocco, great country, but frontiers are there, specially since 11 Sep., as the muslim country it is.

And in Madrid, another day trip is to El Escorial, and see the thumbs af all the Spanish Kings since Philippe II in the same room.

Sure you'll enjoy