All carriers in spain have free incoming calls. You get a phone number with a mobile phone prefix (6xx in spain) and the caller pays the charge via higher rates for calls to numbers with such a prefix. The only time you have to pay for incoming calls is when you are in another country and roaming there.
As far as I know this is how it works in all of europe.

Yoigo has cheap rates but even with prepaid you have a minimum consumption of 6 euros + VAT per month. Also Yoigo is relatively new and has really bad customer service. Probably it will work ok but if there is a problem, e.g. with the activation of the sim card it can literally take weeks to be solved.

Another cheap option are virtual network operators such as Carrefour movil (http://www.carrefour.es/movil). On the plus side carrefour movil is cheap and the phones in their prepaid packs are not locked the provider. However they provide no 3G or internet services at all and the service isn't much better than at Yoigo.

You could also go for one of the big providers such as orange or vodafone (movistar is quite expensive). The rates for orange or vodafone are quite similar.