Bottom line question is if you are trying to target and rank on multiple Spanish speaking country search engines (any language for that matter), is it better to use a .com domain?

There is the country specific model: Google.de
There is the subdomain model: de.wikipedia.org/wiki/Hauptseite
There is the subdirctory model: dmoz.org/World/Deutsch/

I don't like the hasle of multiple domains, and when possible, I like consolidating all marketing/promotion efforts into one main domain. But I'm a small player. If I were a big player with sufficient resources, I'd make it easy for the search engines by developing country-specific sites with country-specific *subdomains* or *TLD's*...each featuring its own unique language, dialect, etc...

A .com used for global ranking purposes won't count against you per se (AFAIK), but country specific domains do tend to get country specific links from regional IP's with language-specific anchor text, etc, all of which make it easier for search engines to identify and rank country-specific sites from regional engines.

Conversely, I've seen UK-hosted .com's trying to rank in the Netherlands with content on a subdirectory of the main domain. Doable? Yes. Preferable? Probably not.

If you want to target speaking language users, I would not bother with a specific domain for every single country. The list would be VEEEEERY long, Spain, Mexico, Argentina, Ecuador, Chile, Venezuela, Costa Rica, Honduras, ... and you do not want to start looking at all the smaller countries in central america that speak spanish.

It would just be easier for you to run it on the same domain you have your english site, and do something like es.mysite.com or www.mysite.com/es/