I bought my Jetta TDI in 2004 and have taken it to University VW for all its service. I have never experienced anything but straightforward interactions with the service department. Prices and problems were fully explained and when they didn't get a squeak fixed, they were happy to say sorry about that and take another look. As for prices, it's a dealership so things are going to cost more, but this is a finicky German car and it's worth a bit more to me to make sure it's done right and that there is an organization to deal with that stands by its work and will make it right.
Unfortunately, every time I have gone in for service, I have seen some customer being nasty to the service staff. I make an extra effort to be courteous and am given that courtesy in return. How would YOU react to people being nasty to you all day? Customer service is a two way street.
If you are considering a VW, I also highly recommend the sales staff, too. Our salesman is no longer there, but he was very pleasant to deal with and seemed like "one of us," not a slickster.
University VW gave me my best car buying experience, and continues to give me great service. Just treat them decently and you'll get the same in return!