Residencia

Under a Spanish Royal decree 240/2007 approved on the 16th February 2007 by the Spanish Council of Ministers, European citizens living in Spain will no longer be issued with Residence cards after the 28th March 2007. The new decree requires ALL EU citizens living in Spain for more than THREE MONTHS to register in person at the Foreigners Office (opposite the Town Hall in Torrevieja) or at designated Police stations. A certificate will be issued containing Name, address, Nationality, Identity number and date of registration. Those who already have Residencia cards, will have to register when their card expires and will be issued with a certificate as mentioned.
One of the advantages of the new system is that Certificate holders will be entitled to permanent residency, unlike now, where you have to re-apply every five years. Further improved rights will also be available to Certificate holders, although I do not know what these are at the moment.
The new Decree 240/2007 has to be submitted to the EU Justice Commission under the EU directive 2004/38.EC. to make sure it complies with the relevant legislation.
Action by the EU is still apparently being taken against Spain, because these new rules should have been in effect about 11 months ago.

Remember you should carry identification with you at ALL times in Spain.
I have no information at the moment what the penalties will be for not complying with the new law, but it is certain there will be some.