Is there a cheaper way to get from Madrid to Barcelona than the $148 train fare I'm currently finding? That fare is way higher than other comparable routes I've found around Europe. It's for travel in late May/early June. I'm up for buses, trains, pretty much anything.
Since you quoted a fare in dollars, are you by any chance using Rail Europe? If so, stop immediately. Start with the official RENFE site http://www.renfe.com/. Here's an extensive TripAdvisor tutorial on how to use it: http://tinyurl.com/cu48wk5 Near the bottom of that TripAdvisor page, they explain that if you can't get RENFE's site to work for you, you can use http://petrabax.com/renfe/, http://www.palacetours.com/renfe, or http://www.rumbo.es (the last won't hotlink for some reason). Others here have had mixed results with RENFE, and report success with these other sites in those cases. They are not quite as cheap as RENFE (they're resellers), but still cheaper than Rail Europe.
I'll check out those sites. I've also since found flights for under $60 and buses for around $40. Would others suggest these options? What about "Trenhotel" from Lisbon to Madrid? Why does it take 11 hours, and is it a good option for transport+sleep/lodging?
From Madrid to Barcelona, the bus takes a long time. With the flight, you have to account for the time and money it takes to get to and from each airport. The train is by far the fastest way, and if you can get a decent fare, may not even cost more than a flight when all costs are factored in. From Madrid to Lisbon, the only train is the Trenhotel; it's supposed to be nice if you've got the time and money. It's slowed down to allow for enough time to sleep. If you don't want that train, fly; use http://www.skyscanner.com/ to check your options (multiple airlines fly this route).
The Promo fare for the AVe train between Madrid and Barcelonais as low as 32€. There are no extra charges like transport to the airport, etc. mthe AVE takes less than three hours to whisk you city center to city center. The biggest issue with buying tickets on Renfe is your American credit card. I had no trouble purchasing lots of tickets on Renfe once I registered my card with Verified by Visa. The Renfe website will look for that when it says it is " contacting your bank.". And as with any foreign purchase,madvise you bank in advance that you will be making a purchase from Spain so they don't reject it as fraud.
And if you absolutely can't get it to work, try Petrabax. They will take your card, and add a small fee to the ticket price, but you still get the Promo fare.
I agree about taking the train from Madrid to Barcelona - and that you can find a cheaper fare. The overnight train from Madrid to Lisbon is the only train. It is fine as overnight trains go but many people do not sleep well on them. I find the idea of overnight trains fare better than the reality, though I've only had a few bad experiences. It's a long trip so the bus is not a good option. I'd fly if it was me doing it again.
There's nothing wrong with either a flight or bus between Barcelona and Madrid. Since the route is well served by high-speed trains, however, trains are my first choice for the leg (but you have to purchase early to get the best deal).