I fear that comment was directed at me
I'm not slating the quattro system at all Tim, I think it's brilliant.
I'm simply giving my advice on what I'd buy out of the FWD 1.8T and the TQS. I think if you can't afford the S3, you may as well just go with the fwd, as it's more exciting to drive. The S3 in standard form isn't exactly super speedy, and the 180bhp quattro is even less so! You could almost say it's a little dull. It does everything in such a 'no fuss' way that's it's just not that interesting to drive.
The TQS seems to me that it's all the extra weight of the S3, with not enough power to make it fun, and nowhere near as nice a place to be... Also, considering how close the prices were of the TQS and the S3 from launch, it's no wonder they're rare cars, they were a rip off!
If you live in the scottish hills and want a smart and comfy car that's not dog slow, and will get you up an icey hill, then maybe the TQS is for you, otherwise, I see no place for it.
I love the haldex system in the S3, and think it works wonderfully, I'm not bitter at all that I own a FWD car. I was SO close to buying an absolute red S3 in late 2007, but decided against it, knowing I'd never be happy with a standard S3, and that I could get more enjoyment from a few mods on my A3, so I kept it.
I'm time, when I'm working again, I will be buying myself an S3 without question, but only when I can afford to spend money on it making it handle and pull like it should.
Back to Audi-33's original question:
I'd get yourself a facelift 1.8T fwd (2001 onwards) and spend a few K on it making it a stunner, or shop around for insurance and buy yourself an S3. £6k will see a fairly good S3 these days, and I'm sure you will be able to get a half decent quote.