Checked out the '97 Passat yesterday. Did a writeup over on tdiclub in the B4 general discussion area.
http://forums.tdiclub.com/showthread.php?t=172832
From what I found checking with the dealer that serviced it, and checking out the car myself - both drivers side windows, CV boots, downpipe, cat, timing belt - that needs repair, I'm thinking that if the dealer won't come at least a full grand off the price, it's time to walk.
There was also no record, either in the maintenance book with the car, or what the dealership had in their records, that the timing belt had ever been replaced. Previous owner had declined replacing CV boots, downpipe, and catalytic converter on last two visits. It had a loud exhaust rattle at idle, so the cat has never been fixed. There was a brand new window regulator in the trunk - pretty obvious, rear drivers window refused to work, front made a loud popping noise when it reached end of travel when raised until you let off the switch.
But otherwise, the car drove and handled well. No fuel or oil leaks even after driving. Looking thru the engine bay, it was apparent all the mechanicals (except for above) had been maintained on the service visits. Hoses, vacuum lines, etc, while not brand new, you could tell had been replaced when needed. All electrical items other than the windows worked. Tranny shifted well and engine seemed to have plenty of power, no popping from the CV joints. A/C and vent system worked as it should.