I was just in Portugal. Lisbon is good for about 2-3 days. While you're there, head to the neighbourhood of Belem for some Pasties de Nata. They're these amazing pasteries. The best ones are found in Belem. Do NOT get on the tram without a proper ticket... and dont assume you can use your metro pass... I had a nice trip to the Police Station and a not-very-nice chief of the station yelling at me to tell me that. Good times.
A quick trip from Lisbon is Sintra. GO THERE. Trust me. It was one of my favourite places. Its a town of about 10,000 people and the whole thing is a UN Heritage Site. It takes about 45 mins by train and is amazing. Its overlooked by two hills, each of which has a Castle on it: One a Christian Castle and one a Moorish Castle. There are also some incredible Palaces there with very unique architechture. Some Pictures:
My girlfriend and I were just wandering around the streets when we found this place:
http://en.wikipedia.org/wiki/Quinta_da_Regaleira and spent the entire afternoon there.
While you're out that way, visit Cabo De Roca which is the Western Most Point in Europe. Dont go there too late though, cause it gets very dark and very windy.
If you dont feel like hanging out in Lisbon, head North to Porto which is the home of Port Wine. Another of my favourite cities, you can go on tours of the Port Wine Caves, do tastings... etc.
In summary, there is plenty to see and do in the immediate area of Lisbon... dont waste time travelling to another country.
edit:
Is it difficult not knowing the local language? Do you get taken advantage of by the locals?
I didn't find that at all. The language is very confusing and doesn't sound like Spanish even though it looks similar. Most of the people we met spoke at least some english... and even if they didn't, were very nice.