OK, went to local VW specialist after work yesterday so he could have a drive and give me an idea of what might be wrong....
He rekons its the diff in the gearbox, apparently mk3 gearboxes are not as bullet-proof as people like to think (mk4's even less so!). The diff gets tiny hairline cracks all over the inside of it over time which allows the diff to expand when warm (hence mine got tricker to change gear the warmer the car got).
Long story short, he reckons I would need a new gearbox to sort it out - ?400 all in: not what I wanted to hear!!! Car is only just coming up to 95,000'ish miles, but he said thay have changed gearboxes on mk3's that have done less, and mk4's.
My faith in VW's has really been tested with this car, been nothing but trouble with electrical glitches and parts breaking and dieing before their time, might just go and look for a tidy mk2!
Go and get your gearbox checked out if in doubt, you might not like what you hear though!