Welcome tot TRF MrTea. Brian is right, he's an arse, but then, several of us here are, butt in the right way (pun intended).
I looked at the vid (rather healthy sounded cab you have there) and here is a list of things it might be:
1. O2 sensor (located on the exhaust manifold under the intake mani, real fun to get to sometimes). CIS (this is the type of fuel injection you have) cars read the O2 and when they don't get anything from it, they will idle hunt (that surging rpm that you see an here). Now, I've not dealt with that on normal CIS, only on CIS-E (which comes on the 16v Scirocco) and that generally happens when cold. It will idle hunt for a few min then settle into limp mode which gives reduced power. Normal CIS may not have that, but I'll look into it and let ya know what I find.
2. Vacuum leak or other issue with the vac system. There are vac lines all over that engine bay and in the dash (controls all your vents) and they will be the unraveling of your sanity at times (if you happen to have any sanity to start with that is). A good first order of business is to learn where they all are, and replace every damn last one of them. The peace of mind alone is worth it. There are also a few vac check valve sensors. Sometimes the diaphragm in those fails and could cause symptoms like you have.
3. Thermo-time switch. This bugger is located in the bottom of the front coolant junction coming out of the block, just below the head. The top radiator hose goes into this junction, so that will help you find it. The sensor hanging out the bottom is the one I'm talking about. It reads the coolant temp and send the info back to the ECU to help control how rich/lean the fuel mix needs to be. This also works in conjunction with the O2 sensor which reads how the engine is burning the fuel. Now you see why this issue can be a pain in the arse to track down since there are several components working together to figure the same thing out.
4. Frequency Valve. This awesome little device is on the back side of the fuel distributor (that really funky thing on top of the air box with all the fuel lines coming out of it). When working properly, it should be making a audible buzzing sound and it should be constant. If it cuts in & out or isn't buzzing at all, you definitely have an issue.
5. Auxiliary Air Valve. This unit is on the back of the intake and acts like an air bypass system. If it acts up (and most of us have had them do it), you get all kinds of issues. Hot starting problems, cold starting problems, idle surge, sudden power loss, you name it. Hard to kinda test this one, but most of the time, it's due to either the electrical connection to the valve or a vacc leak in the lines to & from the valve itself.
6. Idle Screw. Hard to believe with all this other crap and fuel injection to boot that there is actually a damn idle air screw on the throttle body. These little buggers are awesome. They have a small o-ring on them that likes to dry out and just vanish. When that happens, the screw then likes to vibrate all over the place and work it's way out till it finally leaves home and leaves you wondering what the hell is wrong with your car. Sometimes though, you get lucky and the o-ring just shrivels up a bit allowing a vac leak. Replace o-ring, adjust screw till things seem to go back to normal.
So, these are the "Usual Suspects". Sadly, there can be more things, but these are some of the more common and easier to look at & figure out. Look into them and post what you find in the Engine section of the forum and we will help you narrow things down and hopefully find the smoking gun. Oh, and don't let that "Oh hell what have I gotten into look?" stay on your face. It looks like a lot, but you will find that as you learn, this really isn't bad at all. And besides, you have us to help you out. We are like a forum, support group and even an intervention group for those times you think about bolting something onto the car that should just never be allowed in proper cabby taste. So but the serious face back on and go start poking around the engine bay a bit and see what you turn up.
Oh, before I forget. To really work on this car you need a "Bentley Manual" if you don't already have one. If you don't, look for them on E-bay, you really will want it. In the mean time, here is link to a PDF version.
http://www.toplessrabbit.com/files/VW_C ... IROCCO.pdf
That will help and you can print things out, but nothing beats having the whole book in your hands when you are tracking down an issue and printed copy's, well, they tear up real easy. By the time you go through all the paper and ink to print that bad boy out, you could have bought a used copy. So please do, it's well worth the money.