As someone who completed a WVO/SVO conversion and engine rebuild on an older ('81) VW, I'll put in my $0.02.
I enjoyed the process - I used the Gresecar conversion kit. I was originally planning on building the kit myself, and you easily could, but I also appreciated using a "tested" system with some technical support. Their system is in no way perfect, but with some additional accesories, like an in-line heater, you can run WVO/SVO very succesfully. I completed mine out of interest and a frustration over oil companies.
In the end, I loved my VW caddy, but I wanted something more comfortable that had airbags, so I sold it and purachased a '99.5 to complete another Gresecar conversion. I would not hesitate to do it, but then again, if you surf the web you will find sad stories as already mentioned.
I ended up doing a lot of looking to get a good price, but it also needed some maintanance (e.g., new shocks, struts, TB, intake cleaning, tires, etc.). It is a well-cared for vehicle, and it's very clean inside and out (I've had it on the lift a few times), but you are on the fringe of getting a "decent" late model TDI for $6500. I definitely have more than that invested in mine.
In the end, I probably won't do the conversion; most likely, now that it's running really well, I'll run BD.
I'll post a few pics from my 1.6D so you can get an idea of what it might look like.
Overall, the truck ran very well, and I was extremely happy with the results.
If you're interested in completing a conversion on a later model TDI, PM me. I may sell mine for an even newer model. It's a '99.5 GL with 149k, maroon, lots of new stuff, etc. I'd be looking for a little more than what you're talking about, but I would prefer if it went to someone who would use BD or SVO/WVO.