Someone asked for a long-term report with the car, so here goes:
DRIVING EXPERIENCE:
Still superb. The engine is great. I'm running it at Stage 1 tuning (just shy of 200 hp, I think) because 93 Octane gas, which isn't widely available around here, is required for Stage 2. Also, Stage 1 would likely result in essentially no long-term wear-and-tear, whereas Stage 2 might be a little harder on the engine. Besides, Stage 1 is plenty fast for how I drive. I'm getting about 28 mpg (US gallons) in mixed city and highway driving.
Handling remains excellent. There's very little body roll in turns, though more than a 325i. The car feels light and agile in a chicane (though everything is relative; it's no Civic Si in that regard). The best part is steering feel. The steering is nicely weighted and extremely communicative. Best I've ever experienced in a FWD car, by far. It tracks well while accelerating through a turn. The FWD thing isn't an issue so long as you try to drive it like a FWD sport compact and not a RWD car.
I swapped out the stock tires (very worn) for a set of Kumho Ecsta ASXs, which were highly recommended on VW Vortex. Huge improvement. The ride might be slightly harsher, but steering is improved and noise is reduced. Of course, I'm comparing relatively new tires to very old tires. The best part was the price. Even though the Kumhos are rated at least as well as the stock tires on tirerack.com, it was going to cost me $1000 to get another set of stock tires. The Kumhos were $428 out the door.
INTERIOR:
The seat remains comfortable and supportive. I love the adjustability of a telescoping wheel. Heated seats are great, and Mrs. Mitlov is now jealous that her truck doesn't have them. It's got a couple of intermittent rattles, especially when it's very cold out, but nothing really annoying. I still think the interior materials compare favorably with any car I've ever test-driven, including a 2006 325i (note that I haven't been inside of a Lexus or Audi, though). I've felt the interior materials of a MkV, and I think mine are significantly better.
The car is very efficient space-wise. It's small on the outside, but it's comfortable for four adults, and the trunk is gigantic.
SOUND SYSTEM:
The Monsoon sound system has poor bass for a "premium" system, but is otherwise excellent. As such, it sounds like a premium system when you're listening to classical, but it sounds less impressive when listening to rock. Not bad, just not as impressive.
It has an annoying habit of fading in whenever you switch radio stations or tracks on a CD. This makes it hard to rapidly switch stations, and means that you always miss the first second of a song.
The user interface isn't great. The buttons are small, and they're all rectangles, so you can't distinguish them by touch (whereas you could work the Legacy's entire console by touch). On the other hand, I love having steering-wheel-mounted controls. Very convenient.
Overall, I like it. Maybe it would be underwhelming in a Lexus, but for a $14,000 car, the sound quality is amazing.
RELIABILITY:
A couple intermittent electronics gremlins, but nothing serious. Hey, it's a three-year-old VW, it's part of the character.
One time, the traction control didn't turn on, and a warning light came on. I turned the car off, turned it on again, and it was fine. Never had that problem again.
Once or twice, the battery warning light has flashed. A very very brief flash, perhaps 0.1 seconds, out of the corner of my eye. It doesn't stay one, and like I said, it's only happened once or twice.
For no apparent reason, the stereo's volume sometimes sets itself to minimum when I turn the car off then on again. It's an easy fix--just turn it back up as I'm getting buckled in.
OVERALL:
I'm extremely happy with the purchase. Some will continue to pooh-pooh it for being FWD, and others will continue to wave dire Consumer Reports predictions in my face. But I really don't give a damn, because it makes me look forward to driving. And that's what matters, no?