Spanish is spoken everywhere. The pronunciation and the use of the vos pronoun instead of tú is practically the same as the Spanish variety spoken in Argentina, also known as Rioplatense Spanish. However it is remarkably different from e.g. the Spanish spoken in Spain both when it comes to pronunciation, grammar and vocabulary. If you are not familiar with the local dialect, be prepared to regularly having to ask people you're talking with to repeat themselves.
Although most Uruguayans have studied English at school, they do not actually speak or use it. However, some Uruguayans have studied English at private institutes, so they can speak it well. Outside Montevideo, Colonia and Punta del Este there are few English speakers. In most tourist spots (shopping centers and in Punta del Este) there is someone who is proficient in English and upscale restaurants and those that cater to tourists often have someone in the staff that speaks English. In practice, knowledge of basic Spanish is indispensable for independent travel in Uruguay.
Portuñol (or Brasilero) is a mixture of Portuguese and Spanish used near the Brazilian border.
If you want to study Spanish in a language academy, you may want to check out the Grupo de Turismo Idiomático, a private sector initiative supported by the Ministry of Tourism.