In reply to sarahkeast: Your E111 does not entitle you to the same level of care that the NHS provides. It will only entitle you to the same level of care as a national of the country - I believe that in Spain emergency care is covered, but you may find there are things which you would expect to get for free on the NHS which you will have to pay for. I think there is some limited medical cover with the AAC insurance. You should check carefully before deciding whether this together with the E111 is adequate.
Besides covering health costs, travel insurance will also cover things like cancellation, loss of baggage etc. Only you can decide whether this worthwhile.
I usually get BMC insurance for cragging (includes rescue, medical and travel cover for about £36 for a week). In the Alps I usually get AAC for the hut discounts and rescue cover, and don't usually bother with travel cover.