I got mine in May of last year here in Malaga.
I can also report it was extremely easy, with no sign of the huges queues mentioned on various websites.
I went one day, queued for about 5-10 mins max, took the various forms. Filled them out in a cafe nearby, then went to the bank, handed over a few Euros and got my form stamped.
Queued again for 2-3 mins, handed the form over, got told to return 'on Friday' (it was Tuesday if I remember rightly).
I returned that Friday, didn't queue at all, showed them my forms and got given an A4 sheet of paper with the NIE code in the middle.
Pretty easy. It required a little bit of Spanish, but nothing too complex.
A few months later I did a similar thing to get the little green residents card. That was also pretty straightforward, and didn't involve much queueing.
One thing to note, here in Malaga at least, there was a really long queue at the police station I went to. However, it was for something different (visas for those coming from South America/marriage licences/or something). The point being that there was nobody at the police station to tell me the I didn't need to be in this queue. It was only after standing around for a few moments that I went to the front of the queue and was quickly waved past into the police station and towards a different room. To sum it up, there was a bit of confusion.... but at least now as I write in 2012... the demand for getting an NIE in Malaga seems minimal, takes 2-3 days, and doesn't involve anymore queuing than you would do in a Post Office for example in the UK.