Thank you all!
We're back and very impressed with Gibraltar. My 8 year old daughter got to speak English, had a ride in a double-decker, made a phone call from the red telephone booth, saw the monkeys, saw Africa from Europa Point, and ate authentic fish & chips, so it can be a great one-day trip for the kids, too!
As to answer my own questions and respond to your replies as well,
we parked the car in the street, I think it was next to school, and the park meter wouldn't accept more than 4 euros, which gave us a time limit of 4 hours. I was a bit worried as we intended to stay there longer than that, but we talked to a Brit who crossed the border every day to go to work and he said it was OK, and so we chanced it.
We walked across the border (passport check at both points), and then saw no number 3 bus.
The thing because I wanted the number 3 bus was because this map - www.gibraltar.gi/tourism/… - says that there is a number 3 bus leaving from Airport Terminal passing near Trafalgar Cemetery which is a short walk to the Cable Car Base Station.
But we saw only the nr. 5 buses, and the kid saw the double-decker, and so we boarded it.
We bought our tickets from the driver (about 5 euros total for the 3 of us) and the driver said we could use it for all the lines.
So we hoped on and went to the upper deck (of course! :D), there was a short wait at the runway (but it was interesting for us to see how all the traffic stops for the planes landing/departing!) and had a round trip and ended up at the bastion near the Casamates Square twice. Worried that this is the last stop before going back to the border (?), we got off and walked from there through center.
Afterwards we met a number 3 bus near the Cable Car Base Station and took it to Europa Point.
The thing is, the driver said that the number 5 bus tickets supposedly valid for all day wasn't valid for number 3 bus, so we bought the tickets again (again less than 5 euros for the three of us, ticket issued).
Now, I don't know if they were correct or not (for one example, I don't even see number 5 bus on the map I linked before), but the amount was small, so never mind.
Now, I know that the Rock is the highlight, but somehow both I and my husband enjoyed more Europa Point. We enjoyed explaining to our daughter where we are and where African continent begins (luckily we had wonderful weather and wonderful views) and why the Gibraltar Strait is important for the shipping industry, etc. She was learning earlier this year how and why the continents divided, and was impressed to see the small gap between the two.... So she had fun while having a layman geography lesson as well!
Having a round at the playground again there helped too, I think! :))
We went back, got off near the Trafalgar Cemetery again, walked through it, and then walked down Main Street for some shopping in the UK stores and elsewhere (hint: don't buy Spanish souvenirs as they are a lot cheaper in Spain! :)); stopped for a drink in The Horseshoe Bar (friendly staff and great for people watching!), send our postcards on the way, and enjoyed a leisurely walk down to the Casamates Square, where we had lunch in Casamates Square, in Roy's Cod Plaice (spelled on the bill exactly like this!).
Enjoyed the atmosphere, excellent fish and chips and soaked up the sun (paid around 34 euros for 2 medium fish & chips, two pints and a Fanta), before getting on a number 5 bus (using our initially bought ticket) for the border.
Out with the passports, and then back in Spain.
We found our car where we left it, everything in order.
La Linea is also a nice town, the beach with the view of Gibraltar seems interesting even just to stop (not sure about the bathing/quality of water, though), and overall, the whole area is a very interesting place and we recommend the visit. We think we will be back, too!
RE: lines at the border - as we circled in order to find parking space as close to the border as possible, we saw that the line formed and it was rather long, so yes, I do think that it is simpler to leave the car in La Linea.
RE: currencies - we paid with UK bank notes (lunch and drinks), with euros (bus fares), and with credit and debit cards (shops) and had no problems whatsoever.
At the end my daughter wanted to buy some postcards and wanted to use the remaining pounds but was lacking 30p to pay the total, so the kiosk seller took the pounds and some euro-cents for the same purchase without any hassle.
The shopping *is* expensive (even if you count in the tax free zone and exchange rate) and I found Spain more convenient. But I did enjoy some convenient shops for leather bags and wallets.
We calculated that the drinks (we don't smoke, although we saw a lot of people buying (cheaper) cigarettes) were ca. 5 euros less expensive than in Italy, for example.
A lovely spot for a swim, with a stunning view of the Rock in the distance, and en route to Costa del Sol, is La Alcaidesa's sandy beach. Beautiful in the late afternoon light!
Overall, we loved our excursion and would recommend it.
Edited: 6:04 am, September 16, 2012