VW's are not Jeeps, but much like Jeeps they need regular service, VR6 engines are one of the better engines ever, the plastic water flanges and "crack" pipe(water crossover pipe) usually fail after 75-80K, billet Al pieces are available in the aftermarket.
I have never seen a VR timing chain fail before 90-100K (IIRC rec service interval is 75K).
I eat because people ignore VW's service interval schedule. Don't feel like a $500 timing belt replacement @ 60K? Ok, I'll eat much better on your $2200 head job @ 80k.
VW is still the people's car, the peoples just need more money...
Cnickgo, tell your friend to look at Stasis or 034 Motorsports for drivetrain components. The 01E trans (5 and especially 6speeds) have their limitations and flaws. 400hp from a 4.0L wouldn't be very nice to a D30/D35 either... The early/first quattro trans (016) is pretty stout and worked behind the 500hp factory cars with little to no modification. IIRC 034 is using one behind their 1100hp 2.5L 20v 5cyl, but has most likely been worked over.
My 1984 Audi 4000s quattro, a 4 door passenger car, is factory equipped with switch activated spools, I don't believe Jeep (or any other manufacturer) had that option until long after the XJ was dead. Granted you could buy 4 XJ's for the price of a 4000, and 7 or 8 for the price of a turbo wide bodied Urquattro.
A well equipped type 81/85 4000/Urquattro will go further, faster, and with more stability/control on 99% of the worlds roads than any Jeep ever made.
Try watching this (Sir Walter Rohrl on Pikes Peak in '87) , and tell me that can be done in a Jeep.
http://www.youtube.com/watch%3Fv%3DkQnTkV0hA9E&sa=X&ei=PxULTOCiNsKblgeI55npBQ&ved=0CFMQ8AEoADAI&usg=AFQjCNEUgVM_S1g8c3Dlq5is7T4tAOJ7fQ,
Wwildman, are you an air or water guy?
FWIW I have owned 15 type 81/85/B2 cars, I still own 4, a 63 Beetle and a turbo diesel Passat. I am considering a VW L6 twinturbo diesel swap for the MJ when my 4.0L dies.