K you have no spark @ the plug... first thing to do is to check if you have spark out of the coil so pull the center plug wire from the cap and check for spark there. If you have spark there then you either have a grounded rotor or a bad cap (quite common on those vw's as they have a metal emf noise shroud around the cap). If you still have no spark then your problem is elsewhere. Does the motor sound a little odd while cranking? It is possible that the timing belt broke (if there is more than 80,000 miles on the belt it is likely) and therefore the distributor wouldnt even be turning, so with a flat blade screwdriver pop the two clips off of the distributor cap and get someone to see if the rotor turns while you are cranking it. If the belt did break you may also have damaged valves. If its the 8 valve engine (sohc) you should be ok, although it is claimed to be an interference engine, valve damage is unlikely, however if it is the 16 valve motor(dohc)...valve damage is certain.
If the distributor/rotor turns just fine, then you are only left with a few other things..... coil, ignition module(sometimes called the power stage by vw), wiring/relays, or computer. Those computers are near bullet proof so I really wouldnt jump on that( although lots of people like to comdemn what they dont understand...hahahah)
One other common problem is the relay that powers up the computer/ignition system. It is located in position 3 of the relay center under the steering column, if you take the plastic cover off the relay you usually find them full of rust ( convieniently when the base of the windsheild leaks it drips right onto that relay)
Hope some of this info is helpful to you....
