you should be able to pick up a good 1.6 sport for that much. I bought mine with 90,000 for 2,900 nearly two years ago! Its now on 107k and is still running strong. Although there have been a few issues since I've owned it. Last summer I had to replace the gearbox, which was the most costly problem I've had. Its a common issue with these gearboxes caused by rivets attaching the drive gear to the differential which shear off and pierce the casing causing leakage and no drive etc. Since its a common problem there's a premium on the gearboxes.
I've also had my thermostat and temp sensor go on me, which are not expensive to replace. A full tank of 50 litres gives me 330 miles. Not the most economical since they're so heavy. The only thing thats different between the sport and the SE is the interior and the suspension. I just didn't like the seats and steering wheel of the SE models. No difference in performance though. If you can afford to, I'd hold out and save up for a 1.8t. I wish I did...only reason I couldn't was the insurance was(and still is) ridiculously expensive for me.
If not then I'd say go for a facelift model, look a lot smarter. Ask whether the cambelt has been changed and for proof. Check the cars idling smooth, check the gear changes are smooth, get one with FSH, thats been looked after. Check all the electrics stereo etc. just as you would with any other car you're looking to buy. Main thing is just be patient and the right one will come along for the right price.
I get my car serviced by a VAG specialist and get my parts from GSF/Euro, which isn't too costly.