Thanks gti joe,
According to the Bentley book, you disconnect the temp sennsor, rev the engine 3 times, then hold it at 2300rpm and using a timing light you line up the mark on the flywheel with the indicator in the hole on the bell housing. Then, having clamped the distributor in place, when you hold teh engine at 2300rpm and reconnect the temp sensor you should see the ignition advance by 30degrees. If it only advances 20degrees, the temp sensor is fine but there's a problem with the knock sensor. If it doesn't advance at all, then there's a problem with either the temp sensor or the ECU. As my temp sensor seems to be fine, it kinda looks like i might need a new ecu. I was just wondering if anyone else had any ideas. Your mate who worked as a VW tehnician might have an idea. I'd appreciate it if you asked him!!!
Thanks for your help.