The best way of debadging it is to use dental floss. You might need to put some heavy-duty gloves on though, or you'll end up cutting your hands. Get the floss between the paintwork and the badge and try to saw away at the adhesive - you'll have to use a fair bit of force. Take your time and there's no way you can damage anything.
Don't even think about using a screwdriver!
As for mods, being a 1.6 you'd be far better upgrading the looks/handling, as it would be hard (and very expensive) to tune it to a noticable level.
The RS4 wheels are a good start, and from there you should be looking at getting it lowered.
There's quite a few styling options available for our shape of A4; if you want my opinion though, keep things subtle! Do a few searches with Google or a decent search engine for 'A4 styling' or something similar, and you'll find quite a few websites offering bodykits/spoilers etc. Zender and MS Design do some good stuff, and there's also Votex, who produce the OEM styling parts for Audi and VW. Nobody's going to be cheap, so be wary of anything that seems too good to be true. Alot of B5 owners are going for the RS4 front bumper aswell. Most opt for a cheaper replica, but one or two clever chaps have been known to fit a genuine one - involving alot of work to get it to fit properly and look the business.
Have a look on ebay as well, and you might find some styling bits at a good price.
Make sure you sort out anything that may need replacing/servicing before you splash out on luxuries like wheels and bodykits - the last thing you want is a car that's all show and no go. Literally!
Hope this helps.
Drew.
