I guess i'll chime in here having played with beetles for so long, there's a few things that were'nt mentioned here.
There is a few things that effect the ride quality that you can really improve, when you put adjusters in a front rack, the rack is now operating at a lower setting, stock shocks compress and bottom out at 14" from eyelet to eyelet, when a lowered rack needs about 12-14", so the stock shock will bottom out early, giving you a really harsh ride. You can use lowering shocks, oil filled seem to have work the best for me, bugpack makes a really nice set of lowering shocks that have a range from 9"-16"; perfect for a lowered beam.
Also one other thing that's overlooked is the balljoints, when you lower a beam the balljoints could be at their max travel, they are not made to be at extreeme angles of a lowered beam, they also sell lowered balljoints, keep in mind that alot of driving on stock balljoints can make them fail (very very ugly!!!), and give a really hard ride when you lower a beam.
Tire pressures - this is a funny one, when you look at the stock beetle pressures, Front: 16psi city, 18psi hwy, rear: 24psi city, 26psi hwy, your realize that there is alot more room to allow adjustment other than the replica reccomendation. Try running 16psi front and 24 rear, the tires are about half of the suspension, but this all rests on how you drive your car. If you drive it fast, you'd want to increase the tire pressures, and this is also for the 165R15 sized tires.
Dropped spindles don't change ride quality, and is a good option to lower your ride, BUT you have no adjustment, and some dropped spindles also have a larger offset, making the wheel stick out further; so be careful.
Sway bars - if you remove your sway bar, you'll most likely notice a huge improvment in ride quality; assuming that you have addressed the shocks and balljoint issues first. But you'll loose that "flat" stance in turns, and create a little more discomfort in high speed turns, again all depends on how you drive your car. Stock beetle sway bars have a nice balance with not adding too much stiffness to the front end, but still getting the benifit of the sway bar espically in a much lighter speedster. After market "heavy duty 3/4" sway bars add alot of stiffness to the front end of a beelte, never mind the lighter speedster replica.
I'd almost bet that if you have stock shocks they are bottoming out, try taking them off, and putting the car on the ground, rolling it back and fourth to settle the suspension, then measure the distance between the mounts, and then compress your shock fully and measure that. If you are lowered more than about 3", your stock shocks WILL bottom out. If you find yourself bracing for every bump in the road, then you have something bottoming out, either shocks or balljoints, resolve those issues, and expirement with tire pressures and sway/no sway bar, you'll find a happy medium as i did with ride quality and handling.
martin