1996 Passat Wagon TDI here.

Owned this rare beast for about 18 months and 32,000 miles, and can quite happily say that it is one of the best kept secrets out there. I average 45mpg in a 50/50 combo of city/highway driving. It has a range of 1000+ miles, depending on the driver . It has more rear legroom and comfort than any other car I've sat in in the last 5 years, barring an S-class, and there is still room for two dogs in the luggage area. With the same 1.9 liter 4 cyl lugging around a much bigger and heavier body than the Golf/Jetta versions, it is no rocketship off the line, but I hold my own in DC/Baltimore traffic quite nicely. On the move the torque means that I rarely have to shift out of 5th to perform any manouvers.

I'm currently looking at dumping my wife's Explorer so that she can inherit the Passat while I get a 300cd to play with. The Explorer is actually quite a good vehicle, and has been remarkably trouble free over the last 50K miles, but any Ford product approaching 100K makes me nervous, so its going. I'll give my opinion on the MB diesel as soon as I can.