I agree Dennis.  Folks seem to focus in on the head gasket problem of the
Vanagon and ignore the fact that the waterboxer engine is actually much more
reliable than the older aircooled engines and more powerful.  Try to overtax
a waterboxer, you may overheat a little, but if you are smart you can pull
over and allow it to cool a little and then keep going.  If you overheat an
aircooled we are talking dropped valve seats, locking up the engine at high
speeds and possible need for complete engine tear down and examination.  Also
less power (don't tell me there isn't a big difference.  There is a very
noticeable increase in power between my '84 1.9l Auto GL, and my '91 2.1l
Auto Carat.  I can pass with no problem with my Carat but the '84 just lacks
the umph.  And there is only a 5-10 hp difference in the book!).
Heat, unless you do the Bulley method, is poor in the aircooled.  And no
matter how well you insulate there is always the chance of CO poisoning from
the exhaust heat exchangers.  With the watercooled you get great heat from
front and rear and if your heater core leaks a little you get a nice sweet
smell (perhaps unpleasant but it won't kill ya).  Also Vanagon heater cores
(though expensive) aren't $250 each like aircooled heat exchangers and in our
area exhaust systems take a real beating.
Finally there are more polluting than thier watercooled brethern.  Why do you
think VW stopped using these engines anyway?  It wasn't because they just
felt like it.  They had been using the opposed aircooled motor in vehicles
for 40 years.  They would have kept on using it too if the EPA hadn't cracked
down on automotive emissions.  The aircooled engine just cannot be made with
the close tolerances and to operate in the specific temperature range to
allow for clean burning of the gasoline.
So after 40 years they stopped using the aircooled motors here in the US
(they are still using them in Mexico and South American because they can) and
the real shame is that they didn't explain to the public exactly why they
made the swap.  Lots of aircooled fans thought they had sold them out and
still hold grudges against VW.
These are only my opinions.  They are worth as much as you paid for them.
Ken Wilford
Van-Again
John 3:16