I know this horse has been beat pretty hard but I'm not sure if it's dead yet. I called STaSIS and they do not even have an LSD in development because you need the whole system rather than just the differential. Not really sure I need an LSD w/ the 2.0 DSG or not. I'm set on the DSG becasue I commute a lot. On dry pavement the 2.0 DSG has pretty good grip and power transfer. At the very least I plan to chip and maybe add intake and exhaust at the most.

I'm not planning to track very much except for some classes and club days. It just seems sacrilegious to buy an Audi w/o Quattro. It's just so much more $$$ and from what it sounds like the 3.2 is a downgrade w/ limited tuning options. Hmmmm what to do?

under certain conditions (hard driving or high output), a mechanical limited slip is the best way to go. The electronic type is used (ABS sensors used to detect wheel spin, then pulse to slow the spinning wheel, faking the open differential to sending power to the other wheel) because it uses systems already in place so it's cheaper, is easy to set up for a variety of conditions and cars instead of just one, and ultimately replacing brake pads are cheaper than limited slip clutches - although not all mechanical limited slips uses clutches, but they are expensive.<ul><li><a href="http://en.wikipedia.org/wiki/Limited_slip_differential">http://en.wikipedia.org/wiki/Limited_slip_differential</a</li></ul>

would be better than the other. For example, if you need to power through a turn or accelerate through snow, traction control cannot do that for you. However, if you lose control of your car and go into a tailspin, quattro may not be able to save you. That's why quattro cars come with ESP. If you're looking for more traction while accelerating, then quattro is the way to go. ESP could actually limit acceleration, hence the option to turn it off.

If you have the mod bug, go for the 2.0T. The 3.2 is for people who want reliability and performance out of the box. Whatever mods you do on the 2.0T will surpass the advantage of having quattro in the 3.2.