gravityofrune saidIn Chueca, make sure you walk the strips of Calle de Fuencarral and Calle de Hortalleza, and don't miss a chance to go to a nightclub called Polana. Had an awesome time on my last night 6 hours before my flight back to the US. . If someone comes up to you and say "intiende". That means they're hitting on you, and you should follow suit. Make sure you keep an eye out for your belongings as Madrid is known for its "professional" pick-pocketters.
And also, If you have an itch to travel one of the off-coast islands for a weekend .. do so. I think it was only 60 euros to go to Mallorca (another gay friendly city).
I was doing a study abroad program in Spain and i just got back from Madrid two weeks ago. The area Chueca, is extremely fun. I actually made lots of friends when I had gone with a friend at this place called Liquid. The lounge liquid is always full of locals, and tourist so its great to meet people, it's also right next to this cheesy place with a red carpet called Studio 54.
As for clubs, on sundays there's a club Kapital thats seven floors and apparently its one of the best hot-spots because the crowd is very mixed. I actually didn't go, i did go to Cool and I hated it. It's the cliche club where the guys get shirtless and begin to grind next to you, personally i don't like that i feel like they're going to give me a ringworm.
I met a lot of people when I would go to the bars in Chueca, gives you a chance to talk to people and maybe even head out to other parties with them.
I love Madrid, I guarantee you that you're going to have a great time.