I have the factory supplied IPOD mount in the armrest.
Firstly if you have a 6 disk changer in there its easy to swap as its the same cable / connection you just need to buy the insert from the stealers. If you don't have anything there at the moment you will obviously need the cable (standard VW cd multichanger cable).
But frankly I wouldn't.
* It does what it says on the tin but by mimickng a 6 disk changer. CD 1-5 is your playlists (only 5 mind) and CD 6 just plays the entire content of your IPOD. No track names come up on the screen, only numbers...
* I have a second gen ipod touch. Due to a change in the way the pins are assigned on the IPOD it doesn't charge from the car and the lid doesn't shut all the way on the armrest so passenger have to be told to be carefull that they don't break my IPOD
* I had a NANO which let the lid shut fine and charged OK (one of the old tall/slim ones) but it kept jumping out of the housing as I don't have the correct inserts...
You would be better off getting an aftermarket kit and keeping the pod in your glovebox. I've heard good things about the DENISON? kit. On the bright side fitting any of them should be reasonably straightforward as there is a plug on the back of the standard stereo's for this....
HTH