I've got reatively new shocks, less than a year old. I don't think that's the issue. However the springs I changed to were a higher spring rate and higher initial load holding than the ones these replaced in the rear. I think this may be part of the problem because now it seem the back end has an effect on what the front end is doing.
I find this strange, because on my jetta I have coilovers on all sides and on some roads (the coilovers are much higher springrate and load from stock) this does much better that the car I currently drive. I think I might need to change the rear springs to a softer spring and that may solve this issue.
Thanks for all the replies - from this and some of the reading I've done - I tend to agree, sounds like twist beam RS is better is more respects than one.
Is the MK3 different than the MK2 twist beam? I know the track is a wee bit wider, but did anything else change? It seem a bit better than the MK2 ride as well.