I used stainless steel hardware on my exhaust on my 1.9 after sawsalling the old hardware off. 
Stainless works great. I also used antisieze compound on the hardware.

I also managed to find some 8mm all thread in stainless and made up my own exhaust studs coming out of the heads.
This also with stainless nuts worked out well.

My 2.1 I just did had some pretty bad head exhaust studs. I again cut the all thread to fab up some new in stainless.
It is superior and holds torque fine.
Likely only reason vw did not use is cost.

With all thread you can cut to any length and use nuts on each end.

Doug

  ----- Original Message ----- 
  From: John Rodgers 
  To: vanagon@GERRY.VANAGON.COM 
  Sent: Monday, May 31, 2004 9:44 AM
  Subject: Re: Install of catalytic converter on 90 multivan

  Ed,

  I wonder if anyone has attempted to use stainless nuts and bolts as
  replacement hardware so as to avoid the rust/corrosion/need to cut and
  sacrifice/ issues they may be faced with in the future! I know stainless
  doesn't have the hardness as steel on a piece by  piece comparison, but
  it still may be strong enough to do the job.

  Just a thought.

  Regards,

  John Rodgers
  88 GL Driver

  Ed Shultz wrote:

  >Debra,
  >
  >I knew I had to sacrafice all of the fastening hardware for the cat and the
  >muffler. I used a sawz-all type of saw with a metal cutting blade to cut off
  >all of the bolts. My cat dropped right out. I was careful not to damage the
  >flanges on the muffler and the flange on the other side.
  >
  >This method just saved me time when I replaced mine.
  >
  >Ed
  >
  >
  >