I agree. Listening daily to Spanish speakers speaking at their (rapid!) natural pace, and practicing, reviewing, etc. everyday. Practice the basics until you know them very, very well. For some (myself included), it's easy to do lessons, complete exercises, etc. without really learning the material. For example, I can repeat the phrases I hear, even type the words out, without really thinking about what they mean. I have to force myself to think of what each word means when I hear it. I have also recently started visualizing what I hear in Spanish along with translating it. For example, if I hear the word "iglesia" I picture a church, if I hear the word "enojado" I picture someone angry.
As for the listening part, when I first started listening to Spanish radio, I could understand maybe, oh, one word in 5 minutes of listening. So instead of trying to understand what the speakers were saying, I started listening to hear words that I knew. As each days Spanish lesson was completed, I found that I could usually pick out the new words I had learned. At this point (after 6 months of working at Spanish lessons one to two or more hours every day, and listening to Spanish radio, or watching telenovellas, etc. an hour a day), I can understand many more words, but I also find myself sometimes understanding entire conversations!
In addition to telenovelas, which can be found for free online at Dramafever.com, I also watch shows from Vme, which are dubbed in Spanish, but the language is easier to understand because the actors, speaking in English or German, speak more slowly. So the dubbed Spanish is also spoken more slowly than native Spanish speakers would normally speak. You can also see these shows online, I believe by going to the Vme website: Africa Mi Corazon has been a good one for me.
Hope that helps! (P.S. I was a Speech Language Pathologist for 12 years, so language acquisition is my "thing." :).