Yep that's the old OBD port - when I say old it's just the old style connector, the protocol hasn't changed after they fitted what is know known as OBD2 ports (i.e. it's still OBD1 but just has OBD2 connector - hence often known as OBD1.5)
YOu can get adapters on ebay to connect a 'modern' VCDS (or other VW diagnostics system) to it.