I spent ages researching what exhaust to get as I didn't want anything chavvy. I settled on the jetex stainless steel resonated system. At idle and slow speeds it's almost silent but at high revs it has a lovely deep note. It's larger than the standard system but works great with the 1.8t

My car has DTA management, running 215 bhp. In my opinion that is about the perfect amount of power without having an lsd fitted. It's quite straight forward to get more power by going for a bigger turbo but I think you would need the lsd, which would add a fair whack to the bill.
I was lucky, I bought the whole conversion from a guy on my local forum who owned a specialist retro vw garage and can do these conversions in his sleep. The end result is a super quick mk2 that can be used every day, and is reliable.
Cheers
Pedro