Not sure if your your engine is effected but a lot of VW had bad water pumps (the impeller failed or slipped on the water pump shaft). Check that the electric fan comes on and functions properly, that the coolant level is OK. There is a possibility of a blown head gasket, The most accurate way to test for a blown head gasket on a gasoline engine is to test for the presence of carbon monoxide in the cooling system. Snap-On, Matco (part # CO 2000), and Napa sell a tool to check to carry out this test. Another link to a supplier of this tool is http://www.etoolcart.com/combustion-leak-detector-lis7550.... Carbon Monoxide is only present if there is a blown head gasket or cracked cylinder head. http://www.arrowheadradiator.com/head_gasket_or_combustio... I think the Napa part number 700-1006. http://www.blockchek.com/instructions.htm . Signs of a blown head gasket are coolant loss (frequently have to top up the coolant level of the engine without seeing an obvious leak), experiencing over heating or rough engine running or the presence of white sweet smelling steam from the exhaust. A badly blown head gasket may allow engine coolant and oil to mix.
More information specific to your car can be found online. There is a company that independent auto repair shops "buy" their information from that offer a very reasonable service to do it yourselvers. You can get a one week subscription or year subscription very cheap. The information is year make and model specific repair procedures, service bulletins, component locations, wiring diagrams ect.... great quality information same as the professionals have ,much better than generic workshop manuals from parts stores, much cheaper than the factory manual try http://www.eautorepair.net/Marketing/Default.asp?VID=125669 and get an online repair manual subscription.