Everybody's got an opinion, but here's mine:
The VW powertrain the these cars is their greatest strength, as well as the greatest liability.
If you just want a nice, cool looking beach cruiser- then a stock (or near stock) 1600 will be just fine. Throw some ICTs and an EMPI exhaust on it, and call it good. Engines like this are cheap and plentiful, and make about 75 hp no matter what anybody says.
However, if you want something to rival an older 911 (or fill-in-the-blank), then it's going to take something more. A lot more. When you start talking about more than 100 hp, economy really does go out the window. It takes serious money to build serious power out of an engine designed to be at its practical limit at 1600 cc and about 60 hp.
The great liability of the ACVW as a powerplant is when a guy wants 100+ hp, but still thinks of a Type 1 as being an economical engine. Unfortunately, there are many, many, (many) guys just waiting to take your money, and promise big numbers for small change.
It isn't so. In a Type 1, 100 reliable turnkey horsepower retails at about $5K, and takes a lot of work to get there. Every pony after that will cost about $30-50 and becomes increasingly more difficult to get. If you want it done more cheaply, you'll need to do the work yourself- nobody is making Lambo payments on what they are grossing building big number Type 1 engines. If somebody claims they can do it for a bunch less, they are cutting corners.
It's the Achilles heel of the speedster replica. Torque is like a drug, and the Type 1 will only get you so high before it starts demanding some serious coin to feed the habit- but most VW folks are too cheap to want to pay what it takes, and the charlatans and hucksters step into the breach with $2900 2110s.
I'm talking from experience- I'm the cheapest man alive. I've made every mistake a guy can make in this regard. I've thrown many thousands of dollars at a platform that just doesn't like to make reliable power, and I'm WAY past the point of no return.
Jake Raby had it pegged 10 years ago, but we were all too "smart" to listen. The Type 4 fixes all the problems with the Type 1, and is a much better foundation to start building on. A RAT Type 4 can make 200 reliable horsepower, and more importantly that much reliable torque. We all live and learn, but my recommendation is to stick with the simple, small, 75 hp boat anchor that most cars come with, and then pull the trigger on a big 'ol Type 4 when the bug bites hard.
I'm FAR too committed to what I've got to go this direction, but I'm telling you what I've seen. Do it right the first time, and save yourself a lot of grief.
