You can fly into Faro and hire a car to go to Spain.
Luzcar.com do such rentals.
I was down at Faro Airport on Friday and Auriga Crown the Spanish Car Hire operator is opening up a booth at Faro Airport as from April.
Although they have not yet got prices on their site nor indications of inter-country rates, I have confirmed from a webmaster that I know who operates a rental site marketing their vehicles that they have already advised him about their intention to move in the Algarve / (Portuguese) market. If their inter-country drop-off rates are reasonable this could be of great benefit to those wanting to tour the Iberian Peninsula by Car.
http://www.aurigacrown.com
I have also heard rumours that Pepecar is considering a similar move.
As regards Isla Canela, it is a typical modern tourist resort with lines of aparment blocks, beaches and very little else. Ayamonte has some character but there is limited public transport between the two.
I would suggest that Lagos, Albufeira, Praia da Rocha or Monte Gordo might be more of interest.
