The Spanish spoken in Spain is largely the same as that spoken in Latin America. The main difference is accent, although there are some differences of vocabulary and grammar usage. Spain is a great place to learn Spanish that can be used with any Spanish speakers around the world. Read more about Learning Spanish in Spain.
The autonomous community system allows each of Spain's regions to elect a co-language. Six regions have taken up this option: Catalonia and the Balearic Islands have Catalan, Valencia has Valencian, the Basque Country and Navarra have Basque and Galicia has Galician.
Aranese (a dialect of Gascon, itself a variant of Occitan) is an official language in the tiny Val d'Aran, in north-west Catalonia, though it is not recognized in the rest of Catalonia.
Valencian is recognized as a dialect of Catalan by most authorities, though in Valencia it is seen as a separate language. This means that there are four, five or six official languages in Spain, depending on your stance on Valencian and whether you want to include Aranese.
In addition to these official languages, there are a number of unofficial languages in Spain. Asturian and its Leonese variant are understood to an extent in the Asturias and Leon regions respectively, but they are generally considered to be dead languages. Aragonese is spoken around the Aragon river and the province of Huesca in Aragon.
It said that these languages form a continuum - Portuguese, Galician, Asturian/Leonese, Spanish, Aragonese, Catalan, Aranese/Gascon/Occitan to Italian. It is difficult to say where one ends and the next begins.
In Extremadura, a region to the south-west of Madrid, you will also find Extremaduran (considered by some to be a dialect of Spanish) and Fala, a variant of Portuguese.
Finally, there are large immigrant communities of English and Arabic speakers in Spain. Some estimates claim there are one million native English speakers living in Spain - making English as widely spoken in Spain as the Basque language is. In some parts of Andalusia, road signs appear in English and some (around Almeria) are in Arabic.
Thanks to Tim Barton of www.timtranslates.com for helping me with this page.