The city is beautiful with gorgeous, grand buildings and a lovely city park, Parque Retiro http://www.esmadrid.com/en/retiro-park, and many amazing museums.
We were rather short on time so had to take a bit of an abbreviated approach to our visit. A friend with family in Madrid gave some great restaurant recommendations. The food is out of this world and among the best I have had anywhere on the planet and you can see we tried a lot of it!
Here's what we did:
1. Madrid City Tour by bus. This is a great way to get a lay of the land and see all of the sites in a rather short period of time. You can hop on/hop off but we just did the whole route on the bus. Bring a jacket and umbrella this time of year.
2. Tapas at a few bars that were all wonderful. I don't think you can really go wrong anywhere. We had iberian ham, french-fried potatoes with alioli (patatas fritas con alioli which is garlic mayo sauce), bread (pan), and croquettes (corquetas, which are like little breaded and fried wheatflour-based dumplings often with...you guessed it...iberian ham inside. And of course, beer and wine. If you don't know which wine to pick as for the vino tinto de las case (house red wine) or vino blanco de las case (house white wine).
3. Dinner at Casa Lucio http://www.casalucio.es/ . You MUST make reservations, preferably a day ahead of time. You will NOT get a seat without a reservation, as they simply won't have any!). It was FANTASTIC, earned a 10 out of 10, and was the second best meal I have eaten in my entire life (the first best was Peruvian ceviche at Restaurante San Ceferino in Lima, Peru http://www.restaurantsanceferino.com/ ). At Casa Lucio for starters we had iberian ham with melon (jamon iberico con melon), artichoke hearts with ham (alcochofas con jamon), and Spanish chorizo (which is more like a mildly spice hard sausage meat compared to the spicier, ground Mexican version. The Spanish don't do spicy the way the Mexicans do.) For the main course we tried the typical Huveos Madrillenos (Madrid Eggs) which were simply friend eggs on top of french-fried potatoes but were to die for! Egg dishes are very popular and we also had another omelette with Spanish chorizo. We also had lamb chops and an incredible beef fillet medallion (Solomillo) that my son said was the best he has ever eaten. Keep in mind medium rare is called "al punto" but it is more like very rare by U.S. standards. I love raw and rare meat but many people don't, so if you are one of them ask for "mas que al punto", or more than medium rare. It was almost all local patrons.
4. Tapas for lunch at the San Miguel market (Mercado San Miguel) http://www.mercadodesanmiguel.es/ . It's a beautiful indoor, open market with vendors selling tapas and drinks. We went right in the middle of the 2 pm lunch hour and it was so crowded we could barely walk. Just put your head down and plow right through. If you are claustrophobic do not going during the busy lunch hours of about 2-4. We had black rice (arroz negro made with squid ink), traditional paella, croquettes, grilled chicken, potatoes with "spicy" (not really, this is Spain, not Mexico) brava sauce, and wine, beer and soft drinks for the kids. The kids had fruit skewers with chocolate for dessert.
5. Churros and hot chocolate. Traditional breakfast or snack. Fried dough and thick, melted hot chocolate...what more can I say?
6. Dinner at Casa Alberto. Good but not great and more expensive than the much better Casa Lucio. I'd give it a 6 out of 10. We had green salad with warm goat cheese (some of which was cold), solomillo beef filet medallion, beef cheek (very rich and fatty but tasty) and ox-tail stew (again, rich but tasty meat). It was just ok and had almost all foreign tourist as patrons. That atmosphere and service were good. You MUST make reservations. http://www.casaalberto.es/
7. Before dinner drinks at the bar of the restaurant Lamucca de Prado. It was a great atmosphere and we sat by a big picture window and people watched. I'm guessing it would be good for dinner as well and had mostly local patrons. http://www.lamucca.es/es/lamucca-de-prado
8. Visited the Reina Sophia museum. My kids loved this art museum. Picasso's original 1937 Guernica is housed here and was a must see for my husband. The painting depicts the bombing of Guernica in the northern Basque country of Spain by Spanish Nationalist forces during the Spanish Civil war. We have visited the actual site where a symbolic tree now stands and my husband really wanted to see this painting. It is huge and impressive. Warning: There are definitely lots of naked images and mature themes at this museum, so if this bothers you don't bring your kids here. http://www.museoreinasofia.es/index.html
9. A stroll through the city's Retiro Park. It was ABSOLUTELY, RIDICULOUSLY GORGEOUS this time of year with the fall leaves. There's a lake for boating but it was raining and we were short on time. Right now there is a fantastic outdoor photographic exhibit called Wild Wonders of Europe which my kids really enjoyed. The pictures are stunning. http://www.wild-wonders.com/
10. Trip to the Royal Palace. We took pictures but did not want to wait in the insane line to go inside. My parents have been and gave it rave reviews. There is lots of elaborate, gilded royal furniture and art etc.
11. Shopping is A+ with many local and international brands.
12. Museo de Jamon...museum of ham. I was really hoping for an actual ham museum but this is really just a bar and restaurant! We had some jamon, beer and soft drinks there for a snack anyway.
13. We stayed at local brand Hotel Agumar. It was a bit dated but clean, and one of the few hotels that could accommodate 4 people in a room (really for 3 people) for a reasonable price. My kids approved of the buffet style breakfast and they are rather harsh food critics. The hotel is very well located for most attractions. Park Retiro and the train station are within walking distance. If you are fussy or want fancy, better to stick with a well known international brand. http://hotelmadridagumar.com/
Overall, the sites, people and food of Madrid were wonderful and I would highly recommend it, even as a lover of Barcelona! if you are in Barcelona, you can take a cheap local flight to Madrid on Iberia or Vueling (both good, especially Iberia), or Air Europa (have never flown on this one so can't advise) that only takes and hour and a half.
The Museo Nacional del Prado is one of the most famous museums in Spain and most definitely worth a visit. Unfortunately we didn't have time. http://www.museodelprado.es/en
For you horsey types a visit to the Equus tack shop is well worth your time. The owner was very friendly. http://www.tiendaequus.com/cms.php?id_cms=8
Viva Madrid!!! (Just don't tell anyone from Barcelona that I said this.) Spring and fall are the best times as the temperatures are extreme in the summer and quite cold in the winter.
Note: jamon is pronounced "ha-mone" not "jam-on".