I started looking at the same, 2001 S3 here.
As far as im aware (someone will confirm) New arbs will fit standard suspension i think the point made by some is not to do it as many of the standard ones on S3's now has done fair few miles so its putting more strain on tired suspension and worth getting new stuff!
Sure thats the opinion of many but i think its possible to fit to standard if you want to.
As for lowering again mixed views, some say lowering at all you need adjustable tie bars some say they are fine on 30mm without them, think its case by case so lower and see
as for the dampers i believe the general consensus is you can stick lowering springs on standard suspension but as the dampers are designed with bigger springs it is not recommended.
For best results new dampers, springs, arbs together giving you a transformed S3 in the bends!
But it'll cost you as i have found and am now forced to try and stick to a budget, cheaper set ups little bit at a time :-(
Others will comment and confirm what i have said soon i'm sure, thought i would put what i have heard it prior threads down to give you some idea