Real, who won this competition in 1998, went ahead in the 14th minute at International Stadium when Brazil striker Ronaldo finished clinically from just inside the box after Raul had cleverly dummied a left-wing cross from Roberto Carlos.
Substitute Guti, on as a late substitute for Ronaldo, added a deserved second for Real with his first touch, heading in a right-wing cross from Luis Figo in the 84th minute to exorcise the ghosts of the 2-1 defeat to Boca Juniors two years ago.
However, it could have been a different story if Olimpia striker Rodrigo Lopez had not volleyed a wicked cross from right-back Nestor Isasi against the post moments after Ronaldo's opener.
Ronaldo memorably scored twice to give Brazil a 2-0 win over Germany in the
But he wasted a glorious chance to repeat that achievement in the 42nd minute, latching onto a Raul pass only to blast over from close range with just goalkeeper Ricardo Tavarelli to beat.
The Spanish side, who have struggled domestically this season, continued to dominate after the break as they looked to add the World Club Cup to the Champions League and European Super Cup titles they have won in their centenary year.
Ronaldo and Raul both came close in quick succession before Roberto Carlos brought an acrobatic save from Tavarelli in the 56th minute with a curling effort from 25 metres as Real put the South American champions under intense pressure.
Claude Makelele could have put the result beyond doubt in the 69th minute but the French midfielder missed his kick with the goal at his mercy after a pull-back from Ronaldo.
