Hi guys,
I'd rather take the train. Toledo is and old city with narrow streets and parking is not easy... Also, the best way to get to know it is by foot. There are trains from Madrid to Toledo every hour, and you can just buy the tickets in the train station, no need to buy them online (although if you buy online you won't need to wait for the queue...)
train also takes only 30 minutes from Madrid Atocha. I know the renfe site has problems with creditcards from other countries sometimes. Note that from about 1 hour before departure, a separate ticket office opens for this line, as it is not operated by Renfe, but from a smaller company.
A bus from Mendez Alvaro, would be the cheaper options, but takes one hour (but there are many more busses, than trains going.). If at the end you choose to go by car, don't drive it into the old town, look for a parking space in the newer parts.
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