I just bought BtS this weekend, and I've played just one game so far, as Spain in RFC. So, if I build a Spanish city on the spot where the Portuguese would build Lisbon years later, what will happen to my city? Do they get it, or does this keep them from appearing?

You get a choice, either you give it to them when they spawn or you get war and they get most of your units in that area for the next few turns.

normally the best stategy is to give them the city, wait 10 turns then attack while they are still weak. Odds are they will colapse when you capture their capital.

BTW it is by far my favorate way to play civ ATM. If you do not consiter it cheating you could check out the guides here (http://wikirhye.wikidot.com/rhye-s-and-fall-of-civilization) and particuly the map here (http://civ4.technologyresourcesgroup.com/) wlfh fhk various spawn areas.