A group (5 people in our late 20s) of us from Canada have planned to
go to Spain, Portugal and Morocco.  We arrive in Madrid on Dec25th and
plan to leave Jan7th (from Madrid). Two of us plan to stay an extra
week and plan to leave from Barcelona on Jan15th.

We plan to only carry one knapsack each, and stay on the cheap at
different hotels. Also, we plan to get a Eurorail pass for Spain and
Portugal if that makes sense. I would like to find out how we can plan
our trip so we may get the most out of this trip.

Factors to consider (in no particular order):
1. Weather (it is most likely cold in the northern parts of Spain)
2. New Year's eve
3. Cost
4. Safety
5. Mix of activities, sightseeing, relaxing, experiences
6. Rail connections

Some of the places we have considered (but these are only a guide:
Madrid, Canary Islands, Porto, Lisbon, Tangier, Rabat, Casablanca,
Seville.

Ideally, I would like to see a sample itenary on
http://travel.yahoo.com/trip with notes and suggestions on places,
sights to see, food to eat, etc.  But ultimately the info can be in
any form.

Can you help us?  Please ask us for any clarifications.