thanks once again for the advice guys - mixed opinions as always!
The 16v is definately easier on the wallet insurance/fuel wise....I'm not sure i'm too fussed about handling though. I live in central london...the only reason to have a quick car around here is for traffic light grand prixs.
The main selling point of the VR6 is that it sounds like nothing else in my opinion...how to 16v sound with better exhausts? anything close to the VR6?
I live in London and frequently drive into Central London (Covent Garden/Waterloo), and driving around there, you really won't miss the power as you spend most of your time crawling from junction to junction. And if you sit at the lights revving your engine and race of the line, everyone will think you're a tw@t anyway.
So really, it's only worth having the power for when you get further out of London onto the A roads. So that is when the handling will come in.
If you spend more time driving in London (ie slower in traffic) than out on the motorway, the fuel economy of the 16v will be much better and easier on the wallet.
As for the 16v Mk3, it's a good car, great for comfortable cruising, I enjoyed driving mine though I enjoyed my Mk2 16v more. (Miss them both

)
I had my Mk3 16v aged 23 and it wasn't too bad on insurance, then I got a Mk2 16v, insurance was still fine, till I moved to London and my insurance when up by £100 or so.
It's really up to you, what do you want to drive, can you afford it ?