In (extremely short) summary:

A correctly tuned diesel has lower CO CO2 NOx emmissions than a gas
engine, but higher particulates. If particulates are so high so you
actually see "soot" from the tail pipe your VW diesel is incorrectly
tuned.

For those of you seriously interested in emmissions I would recommend
the following research monograph:

CORPORATE AUTHOR: National Research Council (U.S.). Diesel Impacts Study Commi>
TITLE:    Diesel cars : benefits, risks, and public policy : final report of t>
IMPRINT:  Washington, D.C. : National Academy Press, 1982.

This covers technology in the research labs up to '82, which is
what we see in our cars today. Paul Dempsey talks a little about
modern (to appear in the future) diesel emmissions controls in
his newest diesel repair text book (TAB books), but I wasn't 
impressed with his explanations. For current research reports
chech the SAE tech. report series or the several scientific
journals in the area of power and combustion technology.

The European automakers are actively pursuing small automotive
diesel engine development (typ about 1l 3 cyl engines) to meet
new (.2 to .3 l/10km) fuel milage goals. European rules and taxes
favors low total fuel consumption and emmissions and small engines.

/Martin