coconnell: no, there is no registration/program fee. there is with the ciee version of this program, but not if you go through the MEC. the hidden fees would be the fees you have to pay for your documentation (transcripts, apostille, visa, and transportation if you are like some people i know and had to fly to another state for their visa app)
grant recipients can request a community, and once there, can try to send requests for locations. i dont know if my request was honored, or if it was some crazy coincidence, but i sent a letter saying that i studied in sevilla, and universidad pablo de olavide (a university on the outskirts of the city) and had contacts there, yada yada yada, and now i'm teaching at a school which is technically in the town next door, but like 100 yards away from my old university. go figure. its def worth a shot.
also, like vef pointed out, looks like this year placements are gonna be made on a rolling basis. if thats the case, the sooner you get your app in, the better your chance of getting a good spot in madrid.