Ninas, $2K should be about right for your stay here, are you staying in hostels? As for shopping, a good place to shop is the flee market called the "Rastro", I believe the metro stop called "La Latina" is pretty close to it and its only open on Sunday's from 10AM to 3 PM. As for the Euro vs the dollar, for us Yanks living over here and working, we were taking a royal beating the past few monts. But in the last 2 weeks, the dollar has come back a bit. Also, in August it will be hot here, it will probably be in the upper 90's most days, so dress accordingly. For getting around, suggest the "Vison Quest" busses that run through the tourist spots in the city. Our favorite store here is called "The Toledo Store", its near the Prado Museum and they have all kinds of neat things. Also, the Prado museum, the BIG art museum and a must-see, is free on Sunday's and usually not very crowded. Any help I can give you just send me an Email, been here now for 18 months and there are quite a few of us Americans living/working here.
One more note, don't bring traveler's checks, they are a royal pain to cash! Also, there are plenty of cash machines over here.