How to get a NIE

The Spanish government requires you to have an official “Número de Identificación de Extranjeros”, more efficiently known as the NIE, if you want to conduct any sort of buying or selling in Spain. It is more important for real estate, cars, boats etc. but if you want to open a Spanish bank account, you will need one.
You will quickly learn that any sort of bureaucracy in Spain requires a lot of waiting, faffing and difficulty. I can only recommend that you imagine it as a fun challenge to prove you deserve to reside in Spain… or perhaps more imaginatively, you are on a mission to procure a secret code to diffuse the bomb that is going to destroy the world without you. That, however, might be a tad stressful.
The steps to acquiring these mystical digits are, in theory, simple: go to you nearest Police Station with an Extranjeros department. The nearest office to Inhispania is C/ Luna, 17 and is open for DNI appointments from 9am until 2.30pm. Here is the full Madrid list: http://www.policia.es/documentacion/docu_esp/oficinas_provincia.php?id_region=15&id_provincia=28#cuerpo.
You then just fill in and sign the application form (EX18 NIE) and hand it over with a passport photo (remove your funky glasses and hair accessories in the picture - they won’t appreciate them).
Unfortunately the likelihood is that you will have to queue for ages because the Spanish Foreign Office makes no distinction between EU-member state citizens and other foreigners applying for this magical code so don’t lose hope if you have to wait in a long line of questionable looking folk. Get there as early as possible; I have heard on the grapevine that in Alicante, for example, people are advised to start queuing at 5am to get their NIE, because each morning the office opens at 8.30am. and gives out numbers to the first 70 people in the queue. The rest have to return and queue again the next day. In some other cities applicants have to spend half the night outside the office in order to be well-placed in the queue when it opens. So arm yourself with a bottle of water and go with friends to alleviate the boredom … you could always chat to people in the queue and practise your Spanish?!
http://www.dnielectronico.es/

http://www.practicalspain.com/NIE.htm

1. Standing in a queue at the Police station to obtain the forms.
2. Understanding enough Spanish to complete the form correctly.
3. Obtaining a form 790 which you take to your Spanish bank for payment of the required police administration fees of €10.80. 
4. Returning to the police station and queuing a second time to present the forms and the bank receipt. 
5. Often having to return another day to collect your registered applications.