It depends on (i) the age of the car and (ii) the age of the ipod. Mine is a 56 plate, but my ipod touch is newer.
Early cars and ipods had firewire connections, but later cars and ipods use USB. If you use a new ipod with an older car, it'll still work (see below), but the ipod won't charge.
There are two cheap workarounds.
Search "Griffin ipod converter" on Amazon, and you'll find a small adapter (about £20 iirc) which plugs in between the dock and the ipod, and allows charging.
If this makes it too tall for the dock, then buy a 1m extension from the same place (about a fiver), and feed it down to the cupholder area next to the handbrake. This also makes the ipod much easier to plug in.
VW limit what you can control from the head unit, ipod or mfsw while the ipod is plugged in. You're restricted to ffd, rwd and track forward and back. If you want to choose particular tracks, you'll need to set up a playlist and select it before you plug it in.
Hope this helps.