Arrival on AVE to continue on to Toledo.

The train station is Madrid Puerta de Atocha. As you are at the correct station proceed onward to Toledo. The schedules are here - http://www.renfe.com/EN/viajeros/index.html Your AVE ticket will certainly not give you a free (70 km.) journey to Toledo. The combination you refer to is AVE and a cercanias (commuter) train journey.
The relevant bus station is some distance away. 'Is there really no bus from the train station itself to Toledo? Seems odd, as the two usually go hand in hand.' - Sorry, I do not follow your logic.

If you arrive at Atocha AVE station (Puerta de Atocha) at 9:25, the next train for Toledo will depart at 10:20. These depart from the same departure lounge as the AVE trains. If you are coming in an an AVE, you will still have to go up and around to go through security and enter the boarding lounge; you cannot simply stay on th etrack level and cross from one train to another. It sounds confusing but it will all be clear when you get there. It would be good to have pre-purchased tickets rather than have to stand in line to buy them at th estation before that 10:20 train. AS Neil says, the bus station is elsewhere, so the train will be most convenient if you are arriving in Madrid by train.

I have been all over Spain and the only places that I can recall where the train and bus stations were side by side was Malaga and Cadiz. I am sure there are others but it is not common so it is not odd.

Frank - and all I could add, from memory and without research, is Cordoba.

Yes, Frank, Cordoba is where I last found the bus and rail near-by, but there are others I've run into. Also, in California, where I live, buses actually line up to meet the trains. They work in concert. We have so few rail lines that no one would use them at all if there was not a "connection" . You are so fortunate to have a great public transportation system. Here we just clog up the freeways. We're looking forward to all your bus, train, and subway offerings. So you see, we are all coming at this with different backgrounds. I wasn't being an idoiot after all. Rick's friends are ALL smart! Seriously, I thank you all for you really helpful information. We'll make it.

So, Douglas, my ticket does say "CombinadoCercanias". It also says "PTA.ATOCHA". To follow your instructions, I just show the ticket to "a ticket agent" (how do I know to whom, or will it just be obvious?). and he will let me into the ATOCHA area. Where do I then buy the ticket to Toledo? Will there be and obvious window for Toledo connections? Sorry, but this is all new for me. I don't want to have to figure it out when I get there. You are all so helpful, maybe I can get it all straight now.

You should confirm that you will be arriving into Madrid at Atocha Station, as there are two main stations. Where are you coming from? Unless you pre-purchase your Toledo ticket, you will need to buy those once at Atocha. Those can be very long lines - 60-90 minutes in busy times. Be prepared to wait but Toledo trains leave frequently. If you are arriving into Chamartin Station, your AVE ticket will allow you passage onto Atocha. Show your tickets to the ticket agents for the commuter line that links the two stations. People will point you in the right direction for the train to catch.

Hi again. I have just Googled "combinado Cercanies" and came up with information that SEEMS to say (an awkward computer translation, so not real clear) that this ticket allows one to continue travel free to a connecting location within 3 hours of arrival. Is this correct? If so, that solves my problems very nicely. Anyone familiar with these combination tickets?

As I noted earlier, your AVE ticket allows you a connection between Madrid train stations. It does not allow you to take a regular train to another city. You must buy a ticket to Toledo. Based on what you just provided, you will be arriving at Atocha Station so there is no need for the free connecting trip. You'll need to buy a ticket from Atocha to Toledo, which can be bought on your arrival at the station. You could also try to buy it earlier at another station but that might be more hassle than it's worth. Atocha is a big station but there will be signs to ticket booths just like airports have signs. You'll have to draw a number and wait for your number to be called. It can be a bit confusing so feel free to ask someone that speaks Enlgish to point you in the right direction or confirm you are in the right line (there are different lines for tickets depending on where and when you are traveling).

I've got it....finally. Just so I don't have to do anything froms home, I'm fine. I'll just be sure to take a number when I get there. Thanks for your patience!