Thats where your going wrong mate, Dont think of it as a performance upgrade, Think of it as a stepping stone. At the moment your car will only get about 1-2BHP with a intake, However when combined with a full exhaust kit, A Exhaust headder, HT leads and racing spark plugs you will of obtained the basic level of performance modifications, From that point your set to start making larger mods to your motor.
If i could recomend one for you it would be the carbonio long arm kit,
http://www.awesome-gti.co.uk/vw%20golfmk3/engine.html
Howeever if you want a cheaper option then try the ram air kit (situated below the carbonio kit on the same page, Both are long arm ram air kits located behind the grills where the cold air is maximised, Located away from the air box, If your worried about heat however, But a foil engine dress up kit from halfords and cover the pipe with the head reflective coating. This way your getting air from below the motor (and as we all know, Heat rises) And the ram air kits are only about ?55 for a 8V and ?63 for a 16V