You need a repair manual!
Or access to one.  ;-)

Here is an explanation but the much desired pictures seem to be missing.

http://forums.vwvortex.com/zerothread?cmd=print&id=603318

"ah yes, timing the 16v.
timing belt and tensioner should be replaced every 60,000kms (as per VW),
but it's your choice when / if you replace it. Why roll the dice?

anyway, here are some picture of the timing marks on a 16v. the transaxle /
Flywheel mark is accesable under a plastic green screw on cap (no pictures
of it - sorry), but it is on the driver side - where the transaxle mates to
the engine. It's on top. you can't miss it.

The cam marks are on the inside (drivers side) of the pulley.

The crank pulley marks are on the crank (obviously) - but these line up to
the plastic lower timing belt cover - and is not that accurate. the crank
pulley and flywheel sping at the same rate, so use the flywheel mark.

The dot on the flywheel is 0° and the notch is factory timing.

ok, now for the pictures....

crank marks (line up with "V" notch on transaxle housing)

Another shot of the whole flywheel

Cam timing mark

Another cam mark

And the distributor (plug wires info and rotation)

that's it for now...  "