Lowering it with stiffer suspension not only looks better but causes it to handle a lot better, too, considering you've got a lower center of gravity and less body roll. Of course, overdoing it would be lowriders, who do it for the look instead of any sort of performance gains.
And just so you know, these are some estimates as to what the work you want to do would cost you:
Brakes - I'm assuming you're just talking about getting new pads installed and new shoes on the rear, so you're not looking at a lot here. $50 - $200 depending on how you do it, I guess.
Exhaust - If you go buy a fart can, I will kill you. No joke. If you want performance gains, you'd want a catback exhaust, flow-through cat, headers, whatever, because that's actually going to help you (backpressure caused by a restrictive exhaust just creates pressure on the pistons so you lose some power, reducing backpressure = more power), a catback for a Jetta will cost you around $500 for a cheap one.
Turbo - There's a lot more work than you'd think that goes into a turbo. You're not going to be able to turbocharge the 1.8L engine without a whole lot of major engine work and fabrication. You'd save money and time going and getting a turbocharged engine from an older Audi and swapping that in with some fabrication.
Suspension - Stiffer and maybe an inch or two lower, you're looking at $200 for cheap stuff and progressively higher after that.
Chip - A real chip isn't going to cost $11 on eBay, just like that eBay chip isn't going to give you 20hp. A $250 chip will give you maybe 2hp, but will give you a smoother torque curve, higher redline, and in some cases you can get ones that let you use higher octane gas more efficiently which gives you some more power.
Rims - Can be cheap since you can go to a junkyard and get some off another car, clean them up, and roll. Luckily for money's sake, Jetta's have a 4x100 bolt pattern so finding rims is easy. But, for good rims, expect to spend at least $200 per rim. The best looking rims on Jettas are often made by BBS and you're looking at more like $500 per rim in that case.
Paint Job - $3,000. Like I said to you on MSN, my nextdoor neighbour works at Norm's and to get it done right they strip the paint down to the bare metal after removing all the trim, sand it smooth, fill any areas that need it, seal, prime a few times with wet sanding in betwee, then paint many coats with wet sanding in between coats and finally either clear coat or polish, reinstall all trim, and it's done. It's a LOT of work. If you were to paint yourself, just sand off a few layers of paint, maybe down to the primer, then spray on some new primer and wet sand and paint, wet sand in between coats, and then get an electric polisher to shine it up. You're going to need a paint gun and air compressor, too, unless you like uneven strokes caused by aerosol cans because they rely on being well shaked. Don't get me wrong, aerosol cans can do a good job when done well, my Jetta had a few spots that were rattle-canned, but to do it right so it lasts more than a year you need to do all the prep and spray well.
