That looks like an rcd500. If your going to upgrade your radio, to a VW one, you may need the change the canbus to a later revision as the newer VW headunits will cause your car battery to drain when parked up. I have upgraded from an rcd500> rcd510, non-nav-non-DAB, touch screen and its great. It has an SD card slot for MP3's and plays CD MP3's, as well as IPOD and USB connectivity options. The cables are seperate for both though. As for satnav options, many go for the VW RNS510 and can be picked for around 470-500+ second hand. The newer versions are more expensive 600+. But if look around on the internet they can be had for a bargin! If you go the RNS route you want to upgrade your speedo/dash to a Highline dash and install multifunction buttons on the sterering wheel, but you'll need a different wheel I see. The highline dash will display basic nav information as well as music track names an allow greater control/settings for any additional options installed on your car.
Hope that helps