I'm looking to replace my rims and tires (cheesy 15inch stock) on my 1.8T with new rims. some places said I could even go with 17 - 18 inches rims rather than the 16inch on the sport package. What are the pros and cons on this? performance? handling? fuel economy? top speed? does anyone know?

If you go with 17inch wheels you will have the following:

you will pull 1.4G turns
0-60 times will increase 35%
added 6mpg
top speed will be 214mph

not a bad deal =)

J/k - you will find tons in the archives on this and to sum it all up..... Bigger is better performance but your "Ride" will be bit more harsh.