Lots of folks have swapped gas engines for diesels in the VW world. For a Mk1 or Mk2, prior to the more involved computerized controls, it's as simple as removing the gasoline engine, putting the diesel engine in, bolting it up, and doing a bit of plumbing and wire-sorting.
You will need a single switched 12v source for the injection pump's fuel stop solenoid; use terminal 15 from the coil for this purpose, as it's on at the appropriate times.
If you have CIS of any ilk, remove the high pressure pump, accumulator and filter assembly from the underside of the car. Run new fuel hoses from the fuel tank pickup to the hard lines running under the car. You'll install a new fuel filter mount and filter under the hood of the car.
If you would like, you can use the CIS in-tank low pressure pump as a "lift" pump, but you will need to devise some way to lower its delivery pressure to within 5psi. Any higher and you could possibly alter the injection pump's internal timing. If you don't want to mess with this, delete the in-tank pump and run a diesel fuel tank pickup.
You can open up the wiring harness and cut out all that you aren't using, but I'd recommend just tying it back unless you really want to get involved in a project. Without the computer the connectors won't do anything, so it's not really a big deal.
You'll need to wire up a sub-harness for the glow plugs. I'd suggest using the
Vince Waldon's Pimped Glow Plugs method, it's nice, its easy, and he explains it quite well.