In this itinerary I will try to give you the best experience for a one week trip in Madeira. As I mentioned in the Travel Tips, to explore Madeira the best I would recommend to find a nice hotel or hostel (whatever your budget) in the capital (Funchal) and stay there during your whole stay in Madeira. The farthest you wil have to drive from Funchal is a 1 hour drive (to Porto Moniz).
This itinerary is meant to give you an idea what to do in Madeira for a one week stay. I don't know where your priorities are at (hiking, photography, strolling through cities, being at the beach, ...). So I did my best to give something of everything in this itinerary.