The ride is massively better with 17" wheels. With my 18" Monzas hitting a pothole would make a sound more like a *bang* (not quite, but basically there is less rubber between the edge of the pothole and the rim), whereas with the 17"s it's more like a muffled *thud*. Hard to describe, but the difference is truly incredible. After a couple of weeks of owning the car I was starting to feel buyer's remorse as the ride was so much stiffer and jarring than I'd envisioned. Having swapped to 17"s I am super happy and love my GTI. I also put on brand new Michelin Pilot Sport 3 tyres at the same time I swapped (my 18" Monzas had Bridgestone Potenza RE050A tyres), so this may have had an effect, but I find it hard to believe the tyres alone would make such a difference. Maybe it's a combination of the two things, and if I'd put new PS3s on my 18" wheels I would've been happy with the ride. Who knows?
This is obviously a personal issue as several people have stated that they have noticed no difference. But given that my whole purpose of switching from 18" wheels to 17" ones was to improve the ride, and even though this has reduced the resale value of my car, I am extremely happy with the result, so take my opinion for what it's worth.
Visually, the 17" wheels are very very sad compared to the 18" ones, for sure. But for me comfort vastly outweighs the aesthetics of wheel size.