I have the 10 speakers originally with RCD300 which I switched out for an RNS510, sound was a little flat with the RCD300, but with the RNS510 it is more than adequate, and goes louder than I can stand. I have also not found a significant amount of distortion or rattle at the volumes I use the stereo at (up to about half way) Its also very good at bashing out the bass solo from The Chain (grandprix theme tune)
I dont have anything upgraded, or dyna-audio, and it would obviously depend what your comparing it too and how loud its cranked and the music type.
The only comment I do have is that with the fade set to center it does make it seem that the song is being played behind you.
There are speaker upgrades listed on the VW golf accesories page but its quite expensive, have also seen some upgrade kits and whole dyna-audio setups crop up on the bay from time to time. Not sure how easy it would be to fit but think its supposed to make a big difference.