Regen is a periodic incineration of the accumulated soot to clean out the Diesel Particulate Filter (DPF). Extra fuel is injected and burned in the oxidation catalyst which raises the temperature of the exhaust gasses. This higher temp exhaust gas incinerates the soot in the DPF. Mercedes uses the same system in Bluetec diesels.

MB also uses an electric heating element in diesel cars. On a chilly morning (and it don't get that cold here in Dallas) I have seen it take 10 miles for the Bluetec to reach full operating temperature.

Seems like a lot of car @ $22K. I was shopping for a Jetta TDi wagon about 2 years ago. Despite going for a base model with DSG as the only option, the lowest quote I got in DFW was $25-something-K. Ended up not buying one as a result.