This article is from the VW Performance FAQ, by with numerous contributions by Jan Vandenbrande others.
A:Start reading back issues of EuroCar & VW Performance
books. It all depends what you want and for what purpose
(street, autocross, etc). In general people follow the
following road to better handling: Tires and rims,
shocks, sway bars,stress bars.
Tires & Rims:
Probably the biggest single improvement you can make is
by changing the stock tires, and in some cases the stock
rims. It all depends how much money you have, and what
you have as stock equipment. If you want to keep your
original rims go to a stickier tire in the stock size.
Next step up is a wider tire with a lower aspect ratio
for the same rim, e.g., 165/80-13 to 175/70-13 (this is
called plus ZERO).
To make a more significant impact, you will have to
change rims (but be aware that it may put you into a
different auto-x category). Generally, you go with larger
rims (in diameter) with lower profile tires (=> less tire
flex => better handling) and also with wider rims (=>
more sidewall rigidity) and wider tires (=> larger
contact patch on dry roads, more hydroplaning on wet).
Most FWD VWs are made to be run with tires around 1816 mm
circumference, so each time you go to another combination
you try to stay within a few percent of this
circumference so that your gear ratios and speedometer
readings remain the same. Odd as it may seem, rims are
still measured in inches eventhough the rest of the car
is metric...
The upgrade gategories are called PLUS ONE, PLUS TWO,
PLUS THREE, and so on, with each "+" referring to an
additional inch in rim diameter starting from a 13" rim
as a base. Note therefore that many of the VWs you buy
nowadays are already at +1 or +2.
Here's M. Sirota's extensive list of NOMINAL sizes.
Actual sizes vary (note the c-program to generate these
are in the archives):
Spec. Side Radius Diam. Circumf.Revs/Mile Difference
wall
BASE:
155/80-13 124mm 289mm 578mm 1816mm 886 0.0%
165/80-13 132mm 297mm 594mm 1867mm 862 2.8%
PLUS ZERO:
175/70-13 122mm 288mm 575mm 1807mm 891 -0.5%
PLUS ONE:
185/60-14 111mm 289mm 578mm 1815mm 887 -0.1%
195/60-14 117mm 295mm 590mm 1852mm 869 2.0%
205/55-14 113mm 291mm 581mm 1826mm 882 0.5%
PLUS TWO:
195/50-15 98mm 288mm 576mm 1810mm 889 -0.4%
205/50-15 102mm 293mm 586mm 1841mm 874 1.3%
PLUS TWO (MUD AND SNOW):
185/55-15 102mm 292mm 584mm 1836mm 876 1.1%
PLUS THREE:
225/40-16 90mm 293mm 586mm 1842mm 874 0.0%
 
Continue to: