I used to own a Mk2 1.8 8v, it was truly the most fun i ever had on four wheels... well, that i personally owned. I had fully rebuilt the engine and it was fast and reliable. That car unfortunately got stolen and consequently written off by a bunch of kids on the rob. I now own a Mk3 2.0 8v and while it's not the fastest GTI in the range as everyone loves to point out, it's not slow, maybe in comparison, but not slow, all the torque is in the lower end of the rev range where i like it, and yes it all disappears after 5500 revs but unless your a nutter you wouldn't want to be redlining all day long anyway... would you? I drive this car 85 miles a day on mainly A roads, it has done 135.000 miles and is in a good well serviced condition, driven normally it gives me 40- 43 mpg. you can't argue with that.
So to summarise, If you require all out power through the rev range get a VR, If you drive with a heavy foot you'll be happy with a 16v but if you're a fairly sensible chap who likes to put his foot down occasionally but is also fuel concious get a good 8v.
that's my 2 pence worth.
Andy