You will need the following tools:
A brand new oem VW ignition switch (recommended) ($40), Allen wrenches, phillips screwdrivers, flathead screwdriver, the cheap two inch two arm gear puller from pep boys ($4), 10 mm wrench, 1" socket, socket wrench with extension, hammer, and a medium to large C clamp, and a black marker.. If you don't know what these tools are, or how to use them, have the dealership do the job.
The very first thing you do is disconnect the battery with the 10mm wrench, but only the positive side (red). Then, turn the key all the way to the start position to drain any left over electricity pent up in capacitors. I would wait one hour before pulling the airbag to let any extra juice out of the capacitors, some people recommend waiting 24 hours so that the airbag doesn't deploy. I didn't. In the mean time, you can take off the steering column shroud. It is plastic and is held on by two phillips screws. Pulling the air bag was not so bad, but I admit I too had reservations about playing with the airbag. It was the easiest part of the install though. Then you can move on to the air bag. Two allen bolts hold the airbag in place. Once the air bag comes off, pull the little yellow clip off the back of the bag, just pull it. Then remove the steering wheel nut with the 1" socket, and remove the steering wheel, you may have to engage the steering wheel lock to keep the wheel still. Now when you remove steering wheel, make sure you don't pull the plastic cap off the back of the wheel, it contains the clock spring for the airbag, if you accidentally spring the clock spring, you will have to re wrap it very carefully, like a roll of tape, nice and flat all the way around. making sure you leave enough play/slack in it for the wheel to turn lock to lock. I want to place the utmost importance that you don't disturb the clock spring as it is a major pain in the ass, worst case scenario your airbag will blow when you start the car, so make an effort to keep the steering wheel in one piece. Next take the 3 flathead screws out of the signal stalk assembly. Then disconnect all the electrical plugs around the area, then remove the stalk assembly. Then take a pair of pliers and remove the big gold colored screw on the bottom left of the column, you can't miss it, its about three or four inches from the top. Once this screw is out, you have to brace yourself for the fun part.
First, mark the pressfit collar and the steering column with the marker, just draw a line from the center out, this marks where to put the collar back on later. Then mount the gear puller so it grabs on to the bottom of the collar snugly. Once in place, use the C clamp to put pressure on the arms of the gear puller, or else the gear puller will slip off. Then slowly tighten the gear puller, and hopefully the collar will slip off. If it doesn't, and the gear puller continues to slip off, you will have set it up again, but this time when you advance the gear puller you will will hit it with a hammer every half turn or so. This will break the collar free so that it will slide off. I'm not going to lie to you, this part of the install is the hardest, and took me an hour to finally free the collar. It sent me into fits. You may find it worthwhile to grind the ends of the gear puller so that they curve around the steering column a little better, for more grip on the collar. Once the collar is almost off, slide the steering wheel back on slightly, put the key in the ignition and unlock the steering wheel lock by turning the key and steering wheel lock at the same time. Then leave the key in the on position, this is the only way to slide the silver ignition assembly off the column, other wise the steering wheel lock will hold it on. Take off the wheel, collar, and ignition assembly. Once off, there is a little screw on the inside of the assembly that holds the actual ignition switch in, take it out and swap the switch. Reconnect the battery, and the electrical connections behind the ignition, and test the switch. I don't know if the car will start in this state, (sans airbag), I never tested it, I put everything back together and hoped the new switch I bought would work, and it did. Now would be a good time to check though, so you don't have to do all this again if it doesn't work. Like I said, I don't know if the car will start in its current state, but if the dash lights up when you turn the key, you should be good to go. Disconnect the battery. Put the screw back in, slide the assembly back on, replace the gold screw, and line up the collar with your mark. Press the collar back on by tightening it on with the steering wheel nut and socket wrench. Tighten the steering wheel nut down, you will have to remove the key to lock the wheel. Remove the steering wheel nut. Then replace all of the parts you took off in the exact opposite order. When you put the steering wheel back on, if you fit the collar on your marker mark, there is a little dot on the collar that marks the top dead center of the steering wheel, match it with the wheel so that you're not steering wheel cockeyed. Plug in the airbag, bolt it in, reconnect the battery, and start the car. Make sure you watch out, just in case the airbag blows, but mine didn't. I recommend leaning the seat all the way back, rolling up the windows, and closing the doors when you do this. It has been proven to me through demonstration that an airbag is more likely to blow out the windshield if the windows/doors are open. If it starts without a hitch, then drive it around the block to make sure your steering wheel is on straight. If straight, replace the plastic column shroud and pat yourself on the back. If not straight, fix it, you know how to now. Have fun, hope this helps. I would personally check the dealership to see how much they would charge, and how long it would take.
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