Yeah, I hear the horror stories too.
I have 288K on my German built '01 Golf TDI with very few issues. RFront wheel bearing, left strut mount (hit the curb twice in winter on that side), and a day after delivery my check airbag light was on. No squeeks or rattles at all still. But, on my last servicing they said my tie rods were loose so I'll have to get that fixed when I get the timing belt changed shortly. And there was a hole in my exhaust to the rear of the catalytic converter that I had Midas replace for $90 two months ago.
I do believe that generally they are a higher maintenance car you should care more for (my '97 Hyundai Accent was pretty much indestructable save for a computer module which was covered under goodwill at 120K no questions asked) but I wouldn't consider myself a babier of a car. My friends mostly are, but still they haven't had many issues (in friends and family there are a '92 Jetta, '01 Jetta 1.8T Wolfsburg, '00 Golf GL, '02 GTI 337, '99 Passat 1.8T sedan, and '04 Passat 1.8T wagon). Since I haven't experienced issues, and I honestly believe people have blown the VW quality thing out of proportion (other German makes I'm sure have just as many issues, except that usually those are luxury buyers who can more easily pay for the servicing and also - more importantly - get treated and pampered more by those luxury franchise dealerships) I will probably buy another Volkswagen Golf, GTI, Golf Plus, Polo, or Touran if/when available. I'll scope out the market and have an open mind (Hyundais and the Nissan Versa look attractive feature/quality/engine/price-wise), but really like the VWs - engines, fuel economy, roominess, design, solidity, safety, features. That all does come at a price tho.
EDIT: LOVE the A3 in the Murano Green, Venetian Violet, Blues, and white, but the roofline I like so much on the outside compromises head room far too much for me. I'm 6'4" and larger framed. I sat in an A3 and thought "my goodness this is small"... the doors are narrow, back seat short on legroom, and the trunk too. Got in the Jetta and it felt much better, so I'm sure I'll like the Golf/GTI.
I'm pretty sure VW Group realizes there's a concern over quality, and public perception has elevated that to atmospheric heights. They're working on it though - and losing $2B in America alone prompts swift action. The newer cars seem to have more durable interior plastics (less peeling), better electricals, and are still built solidly and have character. But the Mk V Golf and Jetta are still vehicles largely under Piech's reign of uncompromising design... I'm kind of not looking forward to reduced perceived quality products which will likely come from Bernhard. But I'm crossing my fingers.
Overall tho, new VAG products are showing as being more reliable. The Audi A6, for example, marks a huge improvement over the older one and is ranking near the top in initial quality within the luxury market.