We have been travelling throughout Europe this year with a 9 and 11 (now 12) year old. The i-pods have been great. We download audiobooks before long journeys, Rick's podcasts, and travel related stories if we can find them. They also take their DS if there are going to be long travel stretches. As someone mentioned they are not necessary for long international flights, but cheap flights within Europe don't often have movies and we have had long waits at airports and some long driving trips where they have been quite useful. The kids also get tired from lots of sightseeing and just like to play at the end of the day. I am not usually in favour of electronic toys, but they are much more compact to pack then a bunch of toys and loads of books! When we are leaving cars, trains, hotels etc. I always double check the kids have the electronics with them. BTW - I always carry everyone's passports. Would be too much hassle if they lost them.
I recommend searching the net to find books, audiobooks and such for kids about the area you are visiting. She can read those in advance, or read/listen as you travel. Can't think of much for Spain - there is a Melanie Martin book which I thnk is good; a children's version of Don Quixote; today I saw a book on Madrid for Children, but it was in spanish...... We are living in Spain this year and I haven't found too many great books for kids about Spain. We have Tales of the Alhambra for Children, and children's books on the Prado, Picasso, and other art books.
Have fun here!