What is a good way to practice understanding spoken German spoken by real Germans?
"soulkitchen" with Moritz Bleibtreu, "das leben der anderen" (life of the others), "im juli" with M. Bleibtreu are available on netflix, i believe. also, German news in 100 secs ("Tagesschau in 100 Sekunden"), which is available on a daily basis, at tagesschau.de might be a great resource.
I sometimes watch german movies, when I learned English I always watched movies or TV shows from the US, with subtitles of course. So try that, watching movies or search for TV shows, just do it frequently and you'll get a hang of it.
I'd recommend 'Lola Rennt' (Run Lola Run). Also +1 to the DW Nachrichten suggestion.
Downfall is dependent on understanding the Austrian dialect (since Hitler was, you know, Austrian.) One movie I'd highly recommend is The Tin Drum. It's fairly freaky, but the German is very simplistic...almost childlike. Another good one is The Edukators (Die fetten Jahre sind vorbei.) Also, the movies by Maren Ade are on Netflix streaming and she's a hot new director. I like her a lot.
Don't worry about not being able to understand Downfall. Hitler didn't actually speak with an Austrian accent. His pronunciation was fairly standard, except that he sometimes rolled his R's way too long.
I've been using freetuxtv to watch NDR, Noa, and some other German channels: news, talk shows, children's shows, soap operas... They have it all.
You can also watch "angst essen seele auf"(1974). It tells a story about a foreigner man and a german woman. The man has no grammer, if you can understand intermediate level german, this movie is like a "correct the mistakes" test for you. It can be a good learning session for a beginner