I should've posted this when it happened, in February 20, 2010, but now that I have more up to date data, I thought you'd be interested in reading this.
Last saturday started with heavy rain and strong winds which lasted throughtout the whole night and by dawn, the city of Funchal was completely flooded by muddy water followed by trees, branches, rocks and other debris dragged from the high areas by the rain water. Part of this debris caused the water courses which go past some of the city's streets to over flow and thus flood the city with mud. It dragged cars (some with people inside), well, pretty much everything in its way to the seaside. One of the main shopping centers (Dolce Vita)'s parking lot is completely submersed by the water, and as a safety measure it was completely evacuated. In the higher regions, many houses and an old parish have been completely destroyed, most of the roads became impossible to drive through due to the debris in them, and some of the bridges destroyed led to many small villages being isolated from the main roads leading to the city and thus preventing them from being helped. The death toll so far is 42 people, with over 120 people injured and 20+ disappeared. And it gets worse, because, even if the weather is now calmer, there are many people buried in the mud trail, so the death toll is expected to be higher as the searches carry on.
I have felt the bad weather myself, as the strong winds quickly ripped my umbrella apart (the wind speeds were approximately 135 km/h, but I might be exagerating here). Even those people who weren't affected by the bad weather almost quickly emptied supermarkets in fear that they would be soon victims of the bad weather.
In the aftermath, the portuguese government declared three days of mourning. All schools in Funchal were closed and so were most shops (those which survived the bad weather, that is), as everyone was advised by the government not to leave their homes.
Might I say now that, being the Madeira Island a very strong tourist destination in the European market, this is a huge blow to its activity and, being Tourism the main source of income to the island, poverty might soon strike the island as a consequence.
Please post your opinions/condolences here. I'm sorry if you had already heard of this. I'll try to post some sources later.

Heard about this when it happened.
My whole family is quite stressed about this as a few of our relatives in Madeira have gone missing :/
A number of family friends have also died.
And my cousins car was in an underground car park which flooded so that has been destroyed.

I also heard that some resvoir is overfull/damaged and about to collapse and if it does it's going to destroy a few villages along the way, not sure if this is true though.

Im just hoping it all calms down soon. Apparently the weather is moving east so portugal will be getting the brunt of this soon.


Edit:
Sky News Video

I've also heard that some tourists in the high areas have been transported to the Choupana Football Stadium as a safety precaution while the weather calmed down. Now it has been shifting between sunny and rainy all day long.

There are rescue teams working but due to their small number at the moment, while other members and rescue teams don't arrive they're going to work through the night to try and find survivors between those buried by the mud.
I'm not in any way saying that that is the fate of your relatives, but there is so much to do in Funchal and in most high areas.
I don't think that the reservoir thing is true, but I heard that part of the debris has been retained by a house the high areas, but I think that it will most certainly just cause damage as the families living there have been evacuated.

One of the contributors to the magnitude of this disaster is the works done in the last 2/3 years in Dolce Vita's area. The water course there fad its width shortened in order to make way to the roads, the roundabout and also the parking lot. The builders had been warned about the damage it could make to the city in case of another disaster (the last one happened in 1993) but kept the construction going. Another factor was the fact that that water course was used as a sort of a sewer, so the garbage there would amount to the mud and debris and inflict even more damage to the city. I never thought it would make so much damage to the roads, but it even ripped huge chunks of pavement apart!

I'm thinking that their fine it's probably just that they have no way of contacting the rest of my family who are living in Canico.
Phones were down for a while i think so that would be why. Luckily all my family live in Canico so they've not been flooded or anything.
But still rather worried about the rest of my family who have gone missing.

R.I.P to all those who have been killed though.