I've been driving my 2002 1.8T 5-speed GTI now for about two years, and have about 33,000 miles on it. Here are my impressions of the car so far:

Engine:
The 1.8 Turbo is a fun fun fun engine. The main reason I bought this car is because of the engine, and I still don't regret that decision. VW designed the engine/turbo combo so that there is lots of low end torque, something you don't see in the Honda or Japanese cars. When I push on the gas, I want the car to go NOW, not wait for it to wind up to 6000 RPMs before the VTEC switches on. As mentioned by other reviewers, there are aftermarket ECUs (engine control units) to boost the power up another 35HP. I have noticed since I installed mine that the car will occasionally misfire under heavy load if the motor is not warmed up. This isn't too big a deal, though, because you shouldn't be stomping on the gas until the motor is warmed up anyway.

Performance:
The steering feels a little light for my taste, but the wheel is very responsive and gives plenty of feedback. You won't find much better except in a BMW.
My 5-speed manual transmission is merely OK. The throws are too long, and shifting feels kind of vague. If you want to know what a good shifter feels like, go test drive an Acura RSX Type S or a Subaru WRX. The shift knob is shaped like a ball and is very comfortable to grip. One major gripe I have is that my car sometimes has difficulty shifting into 2nd gear when it is cold.
The brakes feel very good to me. The have a linear progression, and stop the car quickly. I go canyon driving in the summer, and can tell you firsthand that they do not fade unless you abuse them very very badly.
For a sports car the ride is rather soft. The GTI will perform better than most cars on the road, but engineers definitely sprung this car more for comfort than all-out performance. The problem is that there is excessive body roll while making hard turns. With a new set of shocks and springs, you should be able to take corners very fast; on the stock suspension be prepared to see the horizon tilt a few degrees when you make a sharp turn. If you plan on taking this car to the track and only make one modification, I would change the suspension over anything else.
One more thing, this car is small and maneuverable. If you live in the city, you will appreciate having a short car which can squeeze into tight spaces when parking is scarce. Weaving in and out of traffic is also easier if you're in a hurry. The GTI feels solid and competent on the highway, even at high speeds. The turning radius is good, but front wheel drive cars never have as good a turning radius as rear wheel drive cars. My big old mercedes could pull a U-turn on a narrow two lane road. This car would require closer to 2-1/2 to 3 lanes to turn around without using reverse.

Exterior:
This car is certainly not the most beautiful automobile in the world, but it aint' bad. The exterior paint has held up fine. I opted for the 17" rims, and they do look very nice.

Interior:
The fit and finish is superb. The illuminated dash at night has an amber and blue theme, which looks really cool. The blue is also supposed to cause less strain on your eyes during nighttime driving. There are no panel gaps, the plastic is soft to the touch and feels high quality, and my leather seats are comfortable and offer good support.
I would have no problems taking this car on a road trip across the country..... as long as I'm sitting in the front. The back seats are acceptable for adults over a short distance, but I wouldn't want to be back there for an extended period of time. Headroom is very good in both the front and the back seats.
The trunk space is a little on the small side, but if you really need to haul a lot of cargo, the read seats can fold down flat giving a surpisingly large amount of space. Whatever hatchbacks sacrifice in looks they make up with utility.
There are a few things I don't like, however. Unfortunately, I've noticed a couple of rattles develop. Also, the cup holder is absolutely terrible. It slides out of the dash, just below the center vents, and if you place a cup in the cup holder, you cannot see the radio display. Condensation from a cold cup has a tendency to drip on the radio, the climate controls, or on the ash tray below. The cup holder rattles a lot as well.


Safety:
This car has airbags in front of the driver, the passenger, on both A pillars, on the side of each of the front seats, and curtain airbags. That's right, 8 airbags in this tiny car. No wonder it weighs so much.

Reliability:
VW issued recalls on the window guides and ignition coils. I have been hit by both problems. Each time I took my car to the VW dealer and had it repaired without any trouble. They even paid for a rental car (as they should). Other than the recalls, I have had several annoying rattles and squeaks develop.

Gas Mileage:
I'm not surprised most people are getting lower gas mileage than advertised on the sticker. This is not the kind of car you want to drive gently. If I drive this car for fun, I see the same 22-26 MPG that others see. However, if I drive gently (i.e. don't floor it, don't speed too much) then I can get over 30MPG on the highway with the AC running.

Overall:
It's no BMW , but you won't get much better without paying another 10,000. If you want all out performance, can handle an ugly car and can afford the extra $6000, buy a Subaru WRX. If you want something fun, stylish, and comfortable to drive everyday, get a GTI.


Amount Paid (US$): 19500
Condition: New
Model Year: 2002
Model and Options: luxury package, 17" rims