I use eco if doing a boring slowish motorway journey. It's the only mode where "freewheeling" happens, which does seem to use less petrol than when in normal - on some stretches, the car's basically idling for a mile or so. If I need a quick burst, I stick the DSG into sport mode for a bit.
I usually have it in sport mode for country lanes or whatever.
The fogging up happened with the car in "normal" mode, so the aircon wasn't in low power mode, though it was about -2 outside. The first time it happened (going through the Rotherhithe Tunnel) it was a bit scary as the lanes are ridiculously narrow and stabbing at the controls took my eye off the road.
The MK5 never did this to us. It would use the aircon to remove all the moisture when recirc was on, which is what I'd expect with the MK7 too. It's the only thing about the car which is a regression from the MK5.