Having just put my GTI back onto 16" wheels from 18s, I can say that the handling and feeling of the car is much better with 18" wheels and it feels far too bouncy and lacking in grip now!
The correct tyre size for 18" fitment on the Golf mk4 is 225/40, which will give only a negligible change in rolling radius from your current 205/55 16" tyres, so your speedo and trip computer will not need alteration. What you will find however is that the fuel economy of the car drops by a couple of MPG, as the 18" rims are normally quite a bit heavier (and have more inertia).
Hope this info helps - just another point that may be of interest is that if you change from OEM (ie VW/Audi) wheels to an aftermarket wheel (including Audi copies/replicas) then you will need to change the wheel bolts as OEM wheels use a spherical seat and non OEM use a conical taper. If you are buying new aftermarket wheels then you will usually get new bolts with them, but make sure that you get yourself some decent locking bolts (eg McGards) to protect your new rims!
Chris