Wow all these people waiting for my post! Sorry I hadn't noticed this before. Now where do I start?
Anyway we moved here 2 years ago and we live between Marbella (posh end, high rents but you get neighbours like Sean Connery and Antonio Banderas!) and Fuengirola (much more Spanish, cheaper but with the stag parties in the bars near the beach). Rents vary enormously, but here large flats with shared pools on long term lets go for around E700 per month. A long let is a year, but you get the right to renew for 5 years - much better than the UK! Prices are cheaper in Fuengirola, near Malaga and inland (we're 400 mtrs from the beach!) Short lets are much more expensive in summer, but cheaper in winter. Prices to buy agin vary, but are around Brighton prices in Marbella (E100,000 for a 1 bed flat) but much cheaper elsewhere. Look at the local ex pat paper site for more details.
The big in order of proximity to Malaga airport (for cheap flights!)towns are Torremolinos, Benamadena, Fuengirola, Marbella and Estepona. All these towns have all the amenities you'll need, but also the big villages are very well provided for: La Cala, Coin, Ojen all have schools, med centres etc (and I don't know about the others). All have several public Spanish schools which have special staff to help ex-pat children who don't speak Spanish. There are also several private international schools, mostly near Marbella but I think there's one in Torremolinos and another the other side of Malaga. Can't remember the website, but search on internatioonal schools Spain for details. As far as I know the schools are good (dd is only 3 mths)
Nurseries are in every big village, but they only take kids from 18 mths. There is also more than one ex-pat nanny agency, but I haven't tried them. Jobs for fluent Spanish and English speakers are pretty good (again look in that local paper) but even if you don't speak Spanish there's a lot of bar / sales / cleaning / teaching / IT work. If you want a proper teaching job (well paid that is) though you need to be here in time for the start of term in September. As a standby though the black economy is flourishing among ex-pats and if nothing else a few hours of dog-walking/bar work/teaching privately through an ad in the local shop should be easy to pick up. I would not recommend you do this long-term though as you need to be paying Spanish social security to get the any routine medical appointment (although many ex-pats simply have health insurance instead).
Health care is excellent in general but there are big gaps. In particular pre-natal care is good, but there is no public post-natal care at all. I have since found out that there are several UK midwives working privately though.
And living here is great. It's a bit hot for me in the summer so I stay indoors, but in Spring/Autimn it's lovely and is never cloudy for more than a week even in January. It can get a bit cold winter evenings, but never drops below 5 degrees C and if you can find a sun-trap you can even get a tan! Also I love the atmosphere of Spanish towns in the evenings and the general laid-backness of the people. Be aware though that many of the villages along the coast are so full of ex-pats that this atmosphere is missing (we're in Calahonda and it's missing here - we're going to move), but it's only a taxi-ride to Marbella / Malaga (possibly also the other major towns - haven't tried yet)!
Lastly anyone who's seriously considering moving to Spain should read Moving to Spain by David Hampshire.
Have I missed anything?