Is the iPod connector free?
It was all clarified in a bulletin from Volkswagen to dealers only, using the ‘Desktop’ communication suite on Aug 14th; ref. no. 0510-08. It is free and should be supplied with the car.
(thanks to Bagwafu for that info)
What is the iPod connectivity like?
The iPod connects via the USB port in the armrest cubby hole using the supplied VW cable. Your playlists and artist/album selections then appear on the touchscreen and can be selected just like on the iPod.
It does not play videos though.