Regarding starting points in Portugal. On a trip (by car) down to Porto a few weeks ago, my wife and I stopped in Braga and really fell in love with it. It has a nice old town and cathedral.
Alternatively, on the border between Portugal and Spain there is an old fortress (La fortaleza) that has markets every weekend. From there it would be a 10 minute walk to Spain; it's just across the river.
Anyone with any ideas about a good starting point in Portugal?