My expectations and observations have been mixed with this vehicle. It was the first car I bought new, and not having a family at the time, I didn't buy it for it's fuel economy - it was more because it was diesel and that was "different".
Pros: With an average of 40K km/year fuel economy has become a huge deal for me (an increase at the pump has a bigger impact than a bump in the mortgage rates). On its 10th anniversary last year I calculated (using a fairly complex formula) that even with the extra cost of the diesel, I had saved over $7000 by going diesel (compared to a gas Jetta). Don't let the 90 HP fool you, there's plenty of torque to keep up with average sedan.
Cons: I expected more from the so-called German engineering. My wife and I learned to drive standard in this vehicle, but my transmission only lasted 250K km. The well documented burnt out lights issue is a nuisance. Cupholder broke after just a year or so, and the lack of cupholders in that model is a common complaint.

All that said, I have no regrets and look forward to buying another VW diesel in the future (if only they had a diesel minivan in North America).

It may not be obvious by this review, but I don't give 5 stars easily because there's always something that could be better. However, with this vehicle I am rating it against what's available out there (not what "could be").
I've had the van for 2 years, put about 78,000km on it and I don't regret my purchase one bit.
Pros: We do about half and half highway/city and since we bought it we've averaged an 8.9L/100km. We recently returned from a 15,000km road trip crossing 4 timezones with 2 adults and 4 kids and it was a comfortable and reliable way to travel. Lots of cargo space. I highly recommend the seat covers - they are a life saver with kids. Entertainment system is very useful on long trip or when parked at the grocery store with dad (waiting for mom).
Cons: The stock Continental tires only lasted 35,000km which was disappointing (but there's no rating for that specifically). The music hard drive could be larger - with all the kids' CDs it gets filled up pretty quick. Probably my biggest complaint (because I have to deal with it so often) is the speaker volume at the back. I have to use Fase to set the sound 100% to the back and crank it to 90% volume just for the kids to hear anything sometimes. It would also be nice if the volume automatically faded to the front when a call comes through via bluetooth.