I don't think it's a question of stopping Xavi and Iniesta as no matter how tight you get to them, no matter how much pressure you put them under, if they are on their game then there is nothing you can do to stop them.
The only way to stop them is to not let them get the ball which means pressing higher up the pitch and putting the likes of Pique, Puyol and Toure under pressure. It's something you done for the first 10 minutes yesterday and it looked like only being 1 winner but after that it was just too easy for Puyol et al to carry it forward and lay it off to Xavi or Ineista and to make things worse your organisation in midfield and at the back made it even easier.
Even without putting them under pressure at the back they still made mistakes but too often there was just Ronaldo up top on his own and nothing he could do.
edit: Btw i've been told that Xavi and Ineista got their inspiration from this: