We just came back from our little holidays which took place in Madeira Island. We went there for 5 full days, which for us were enough to visit, rest and even sun batch. We came to Madeira by plane - obvious, it was quite cheep, because price in both side was about 60 e. Airport is located more less 30 minutes from Funchal capital of the Island, where you can go from airport by bus. It cost about 3,3 e. In Funchal we booked a room in well situaited hostel ZARCO. The room wasn't really 5 stars kind, even worst and awful smell but in second day some guy came to our room and painted the walls - happily, We had to go to reception and report it because it was impossible to sleep there any more. Then we got a room much better standard with one disadvantage - third bed on the attic - of cours i took it! :) it was fun!
During our stay we visit Jardim Botanico, all Funchals area + we went to Praia Formosa to sun batch and swim. To all this places you can go by bus from Funchal. During our stay we had a plan to rent a car but unfortnatelly we couldnt because it is necessary to have 23 years old and 3 years at least of driving licence. It is impossible without it. In this situation we bought a trip in local office "Madeiramjtours.com' The trip was about visiting northwest parts of the island. We were all satisfied with it because we have visited almost a whole Island. It took 8 hours so it's not so long and we were driving, seeing the places then make a quick stops to walk, look around and take photos. All in all I would not recomend to rent a car because roads in Madeira are very difficult. Those are very, narrow as well as uphill so it is much safer to travel with local driver. Some helpful link above as well as some photos
http://www.residencialzarco.com/ -> HOSTEL
www.Madeiramjtours.com -> TRIP