No rust, no issues? If so, could be either a great deal or something that will fall apart. Same for any vehicle, really. Me, I'd be tempted to jump on this.
At that age I'd be thinking it might be due for lifters and/or camshaft. Maybe, maybe not. If you have the tools to do a timing belt change (engine lift, VCDS software, cam/crank locks) then it shouldn't be a problem.
If that is the original water pump it is way overdue. I'll go out on a limb and guess the timing belt was changed--but I'm dubious as to if it was done properly, and if all the other parts were changed too. I'd probably shotgun a new timing belt ASAP, as I wouldn't trust prior owners / unknown shops. Once the belt breaks the repair bill starts at $1,500--and climbs from there.
This is a German car. They don't take kindly to improperly done service nor to not doing things on time. As a VW, and an older one at that, I'd plan on getting VCDS (see Ross Tech for "VAG-COM" software) as you'd need it for timing belt changes, and to diagnose when it breaks (not if! but when).
tdiclub.com is a great resource for VW TDI specific info (myturbodiesel.com is another one but I have not hung out there); I usually buy my parts/fluids from ipdarts.com (in case you want to window shop parts and fluid costs).