I have a 98.5 2.8 5-Speed Quattro with both the sports package and the cold weather package.
To me the cold weather package is a must where I live (NE Ohio) because of the harsh winters mainly for the heated seats and side mirrors. I personally don't notice a difference between the heated windshield washer nozzles and regular washer nozzles on other cars and the same can be said for the heated door handles. I do also ski/snowboard so the ski bag in the rear armrest area is nice as well.
There is one item from the sport package that I would have to have and that's the 3-spoke sport steering wheel (I personally hate the 4 spoke design). If I was buying the car new I would want the sports suspension (shocks, springs, sway bars), but with how high the milage these cars have now as well as their age I don't think it's a deal breaker as the stock suspension is most likely in need of replacement and there are better aftermarket sway bars to be had (I know I'd like an upgraded rear bar at least). I'm sure the stock sports wheels and tires might have been nicer back in the late 90s, but I personally would rather have a different wheel/tire package (I have B6 17" Sport Wheels on my car now).
As for the sport package having better seats this isn't true as not all sport package cars came with the sport seat option (sport seats are basically S4 seats in cloth versus leather or leather/alcantara). All of the B5 A4s I've seen with the sport seat option were 1.8ts and both of the front seats were manual. I'm not sure if the sport seats could be optioned with a powered driver's seat or with them as heated or not. Personally, I hate my stock leatherette seats as they provide no support when compared to S4 or A4 sport seats.
Honestly if I was buying a B5 again this would be my must haves...
1. Well documented service records and free of rust
2. Quattro
3. Manual Transmission
4. Facelift (00-01)
5. Cold Weather Package
6. 3-Spoke Sport Steering Wheel
You mentioned you want to Auto X the car. Where will you be Auto Xing it? Does the group that you'll be Auto Xing with follow SCCA rules and classing? If so you need to look at how the B5 classes and how mods will change your class. If I was going to do a B5 for SCCA Auto X (in which it really isn't a competitive car due to classing) I'd stay in a stock class and would probably go for a 1.8 Quattro 5-Speed with the sport package and sport seats. Throw the best tires you can afford on the stock wheels, new brake rotors, aggressive brake pads and enjoy it.
Hopefully my rambling helps a little.
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