The wipers are a pain in the arse on the MK4, You can stop the rain sensitive wipers by replacing the relay with one off a normal golf. This will allow you to use the speed toggle. You can't use it with the rain sensor! can't think off the relay part number off the top of my head, but i'll try and find it. Do a search on here, it's been done plenty of times! Hope that helps!
When my wipers go tits up all I do is to turn them off (Down one setting and back up to auto)
Having it up 1 notch is putting it in auto, have it up 2 notches to set it to manual. Does that work?