Updated: 8/3/09
Current status: The GTI currently runs and drives and is a lot of fun. I recently installed an Autotech 276* cam, and have done a bit of cleaning in the engine bay.
I am building a new motor! It's going to be similar to the existing motor, but fully rebuilt, with a balanced bottom end, and a much better cylinder head.
Last winter/spring, I installed new suspension and steering bushings to make things tight and crisp. I also put on an Autotech 4-point lower brace, new control arms, and did the wheel bearings. It's nice and quiet up front, and super solid. The rear is still stock at the moment.
Here's a most recent picture. A friend sold me these OEM Snowflakes:

The pictures will go in order starting from when I first got the car, to how it is now... (I'll reverse this sometime soon)
When I first got the car:

The interior was a mess, so I gutted it!

Exhaust was shot when I bought the car, so I got a high-flow catalytic converter, and a Techtonics Tuning Cat-back exhaust.

Drilled out the shock absorbers in the Front and Rear bumpers to tuck them in.

Modded the airbox & Fiberglassed a soup can to the lower half to allow a larger hose to be run down below the bumper.
New on left, old on right:

Fiberglass work:

Made my own weighted shifter linkage, and installed a Techtonics Tuning short shift kit. (Not visible in pic)

Modified the transaxle linkage to get an even shorter throw.
Left = before. Right = after:

I bought a Dual outlet exhaust manifold/downpipe, and a Neuspeed throttle body. (slightly larger than stock) I smoothed out the throttle body and bolted it up to a spare intake manifold that I had cleaned and painted. Then on a nice day I swapped the stock parts off, and installed these.
Comparison shots, new on left, old on right:

New on the right, old on the left:

The modifications up to this point made the car a little faster, but I wasn't satisfied...
So I bought a 2.0 Liter ABA engine from a '95 Jetta. (Stock engine is 1.8 Liter)

See page 2 for what came next!
Page 1: Intro, first modifications.
Page 2: Engine swap. Winter '04-05.
Page 3: Winter '07-08 Progress and recent pics.