A survival of Islamic Spain is certainly possible. Indeed, in retrospect I see no more reason why it's less possible than the survival of an Islamic Anatolia. I think that the main reason that Spain fell back into Christian hands was due as much to factionalism among the Moors as to the martial efforts of the Christians. There are a number of PODs that could change that.
The ramifications would be huge, as the entire discovery of the New World and its subsequent colonization (if it happened at all?) would be done in a different manner by different cultures. And, obviously, a surviving Islamic Spain would radically impact the future course of European political and religious history.