From TDIClub

There are two primary types of engines in the late model VW's, which are the VE & the PD

The VE engines are a distributor-pump type, where as the PD engines are Pumpe-Duese engines.

In the North American market, VE type engines were in all TDIs sold before model year 2004 and PD in model year 2004 through 2006.

In the European market, the PD-TDI was released for the 2000 model year.

[edit] Oil for VE Type Engines

VE-TDIs are specified to use an oil meeting the Volkswagen 505.00 specification, with an SAE grade of 5W-40 in most cases. A TSB issued to VW dealers in 1999 says to use 5W-40 synthetic oil.

Many 505.00 oils are available on the market today.

Insert link to list of 505.00 oils

Some people use alternative oils that meet the ACEA B3 or B4 and API CF-4 or CG-4 specifications, also permitted by Volkswagen (note that API CF-4 and CG-4 are fulfilled by API CH-4 and CI-4, but not API CF). Shell Rotella T 5W-40 synthetic and Mobil Delvac 1 5W-40 are two popular alternative oils. (Mobil Delvac 1 is also sold as Mobil 1 Turbo Diesel Truck 5W-40 or the discontinued Mobil 1 Truck & SUV 5W-40 oil, or repackaged as Caterpillar DEO Syn 5W-40.) Another good choice is Petro-Canada Duron 5W-40.

VW 505.01 rated oils, such as Castrol TXT 505.01, are intended for PD-TDI engines. However, these oils also meet VW 505.00, which is a prerequisite to the VW 505.01 rating, and are therefore suitable for use in older TDI engines that specify VW 505.00 rated oil.

VW dealer service records should list oil part number as either ZVW-352-540S (Castrol Syntec 5W-40) or G-052-167-A2 (Castrol TXT 505.01) for cars where VW 505.00 rated oil is specified.

[edit] Oil for PD Type Engines

The PD-TDI engine requires oil that is certified to the Volkswagen 505.01, 506.01, or 507.00 specification.

In Europe, these oils are readily available, but can be difficult to find in North America.

In North America, the easiest place to get a compatible oil is at your local Volkswagen dealer's parts department. The oil that your dealer will sell you is Castrol TXT 505.01 5W-40, a VW505.01 oil. Do not confuse this oil with Castrol Syntec 5W-40, which is VW 505.00 rated, but not VW 505.01 rated (it is also sold at VW dealers and is used for VE-type TDI engines, as well as VW gasoline engines, since it also has the VW 502.00 rating).

If you are looking over VW dealer service records, the oil part number for VW 505.01 rated oil is G-052-167-A2 (part number ZVW-352-540S is incorrect for a car where VW 505.01 rated oil is specified).

Other VW 505.01 rated oils available in the US include Motul Specific 505.01 and Elf Excellium DID.

Beware the "meets or exceeds" game. The oil has to be certified to these standards by VW themselves. Amsoil is one notable oil brand which does not have such certification. They produce an oil which states VW 505.01 on the bottle, but it is not on VW's list of certified oils. If something bad happens when using oil labeled with 505.01 language like "Recommended For ..." but not a true 505.01 certified oil, there is a possibility that VW isn't going to warranty it (on the grounds that you did not use the required VW certified oils).

[edit] 505.01 vs. 506.01 vs. 507.00

In Europe, most cars should be equipped with a variable oil change interval feature. A 506.01 or 507.00 oil must be used if one is using this feature.

In North America, the high sulfur content of current diesel fuel means that the variable oil change interval cannot be used. 506.01 oil may give you a fuel economy increase. However, the 506.01 oil is more expensive.

506.01 has been deemed acceptable for use in North American TDIs by Volkswagen of America, as per letters that SUNRG and logismoi recieved from Volkswagen.

507.00 is a recommended oil, in addition to 505.01, for use in the 2006 and 2007 model years Touareg V10 TDI, which are equipped with a particulate filter.