A little white smoke on startup is normal, but tons is a bad thing. I'd check the pump timing first: retarded timing will give you white smoke at all times. I just worked on a car that I put a used pump on. It ran like crap and smoked white alot until I pulled the cold-start lever out all the way. It turns out I had set the timing with the lever partially out, so at idle with the lever in, it was retarded.
If the timing checks out, look for leaks. The easiest way is to look at the fuel return lines at the injectors. If they're clean, then check the clear fuel feed line at various engine speeds. If you see any bubbles coming thru, then you've got a leak. If you see one huge bubble after you let off the idle, then your fuel filter is clogged.
If all of the above checks out, then if sounds like you've got bad valve seals. Does the smoke smell like oil? Bad valve seals will make excessive white smoke at startup, because the cylinders fill with oil as it drips down the valves when the car sits overnite. Then, the oil will build up in the cylinders while idling at a stop light. Once you reve it up and take off, the oil burns off and leaves a plume of white smoke.
To be honest, I think that this last scenario is what you're dealing with. It's not the end of the world. An experienced VW mechanic may be able to replace the valve seals without removing the head.
Good Luck.