MFSW was factory fitted. Car is an 07/07 R32. I don't have access to VCDS.
I'll hazard a guess its just not properly coded. When you scroll through the MFSW screens (with the RNS turned on) do you see a screen called Audio?
Did this unit replace a MFD2 sat nav?
If you've purchased this from an installer then I would be inclined to get them to come back and code it properly!
Not much of a delay - 30 seconds or so (might be less). DVDs and Audio CDs play fine.
If the DVD drive is working OK then there are two likely problems. Either the firmware you have downloaded is incorrect - there are modified firmware images for Skodas for example that will fail to load on a VW unit, or the download is just corrupted - it happens, always worth downloading again if you are 100% sure it's a valid VW image. It might be that the mods won't like you posting links to firmware images but perhaps if you PM me the source I can help you determine if it's valid or not?
Another possibility is that this is a unit that has been bricked and then repaired. A bricked unit is one that has failed a firmware upgrade in the past and is then rendered useless without a hardware repair. There are a number of causes for a failure to upgrade firmware - some legitimate, some not. The repair for a bricked unit can mean that it cannot then accept further firmware upgrades.
I'm sure there'll be some good news along shortly.......