Hi,
I feel your pain...I have a Mazda 626 and its got some issues. But I also have a VW Passat...newer model though 2002. I like the Passat a lot and it has worked well for the past 1.5 years. The Passat is derived from the A4/A6 family (basically an A5ish) and its got the same drive components. VW really changed their attitude in the late 90s since VW was loosing market share to the bigger brothers - BMW and Mercedes.
I haven't heard much about any recent steering rack problems on VW. Most of the problems that I am hearing are electrical problems. If you think VW is bad...try an BMW. You'll get to know the dealer very well
Say...do you get your repairs done at the dealer or by yourself ?
VWs are like Ford of Germany...they aren't that great but they do handle a lot better than most America fords.
- Victor.