Saw this at the New England Auto Show yesterday. I was quite impressed, as I haven't heard any marketing around this new car.
I don't see it as direct competition against the Passat. It looks way better than the Passat, but maybe a bit too much like the M-B CLS.
I was quite surprised to see the starting price for the Sport/Standard edition in 6-speed manual start at a pretty reasonable price $26,790, I even went to test drive it after the auto show at a local dealer. I was impressed at the handling response and the power from the 2.0T, much more fun to drive than my '06 Accord 2.4L. The only downfalls are that there's no moonroof option on the Sport Edition (which is the only equipment package which manual tranny is available), it's a 4-seater (the center rear is used as a console and cup holders, etc.), and it requires premium fuel.
For starters, it comes with heated seats (leatherette seats for the Sport edition), 6-speed MT, 6-Disc CD changer w/Aux input (something the new Accord still doesn't have), fog lights, 12-way power adjustable seats, 3-position memory function seats and exterior mirror, outside temp display, power windows, foldable key fob, Electronic Stabilization Control (ESP), AntiSlip Regulation (ASR), Electronic Differential Lock (EDL), ABS, Tire Pressure Monitoring System, 17 inch alloys, etc.
I almost forgot to mention that VW has free 3 year 36k mile Maintenance for '09 vehicles.
I think I'm going to hold off until there's more reports about initial quality ratings, and longer term reliability, as it's pretty dicey to buy a first year model car, especially for a European car. The only thing holding me back is very poor-average VW reliability ratings for their other models. I'd also probably want to wait until the '10s come out to get a good deal on a '09, and if this car actually sells in a very tough market. I think this car is very competitive against Accord V6, TSX, Mazda6, etc. and looks way better than any of them (especially the interior refinement).