Even though i have a 1.8t, i think i can still answer your questions.
If you use 2 anti-foulers between the bungs on the test pipe and the secondary 02 sensors, you might be able to avoid a CEL. That's what i did when i installed my test pipe this past weekend, and so far i've gone about 400 miles and 20 engine starts and the CEL hasn't come on yet. So hopefully it won't come on at all.
As for the smell, it really isn't that offensive. Maybe if somebody had to follow behind you for a long time they'd get annoyed by it, but it really doesn't smell bad. I expected it to smell like that nasty unleaded sulphur smell, but it wound up being a lot like motorcycle exhaust.
And the exhaust is a bit louder, but in a good way. I can hear the turbo spooling loud and clear now and it sounds great. Getting rid of the cat gave me more of an aggressive growl at higher RPMs too.
Hope that helped.
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