As the fly crows, Falfeira is about 1 km from the Modelo supermarket down a dirt track which is not in very good condition.
By tar road it is about 4km from town. Walking is totally impracticable as there are long hills.
You would definitely need a car for the shopping etc.
Follow-up: 19:30
Just been up there.
Casa Sebastião is situated at the extreme east end of Falfeira and technically 1km by road from Lagos.....THE TOWN BOUNDARY sign behind McDonalds on the road to Aljezur! Just measured it on the speedo.
It is situated on the road, that runs from the Lagos to Portelas/Bensafrim, along the ridge behind Lagos to Funchal Ridge.
As I stated earlier it is not easily accesible by foot from Lagos. It is at least 2km if not 2,5 km from the main centre or town down the Avenida. The climb back up is along a national road with no sidewalk. It is a constant steady climb for about 800 metres.
The nearest supermarket (most direct by road) is Pingo Doce about 1,5 to 1,8 km away.
In my opinion it is defintely a villa where a car is required!
The green arrow shown on the following google map gives an approx location within 30 metres.
http://maps.google.com/maps?q=37.115904,-8.691131&t=h&sll=37.15781,-8.734502&sspn=0.071158,0.128059&hl=en&ie=UTF8&ll=37.115893,-8.691194&spn=0.00397,0.009645&z=17
Addendum - November 20, 2009.
Taxis in Lagos are expensive. I would think a fare to and from town would be in the order +- € 6/7 each time.
There are regular buses that pass down the road to Portelas - EN120 with two stops one each about 120 metres either side of the intersection. They are Curvas do Garrocho and ETAR.
Lagos bus company - http://www.aonda.pt/ - operates two lines via those stops:
LINHA 6 (ONDA VERDE)
LINHA 7 (ONDA CASTANHA)
Algarve Bus Company - http://www.eva-bus.com also operates its service to Aljezur along this route.
The climb up to the villa is a long incline as I have said before and there are no pavement along the side of the road. That makes this section of road between Macdonalds and the house dangerous, particularly at night!!!
If you have any doubts, I strongly suggest you hire a car!!!