To locate TDC, remove the distributor cap and line up the rotor with the notch in the distributor body. The rotor should be pointing at the #1 ignition wire. VW's firing order 1-4-3-2 #1 cylinder is located on drivers side (left) of the car furthest from the fire wall. Or, if you have a rear engine, the #1 is located on the Passenger side (right) closest to the fire wall. I use a large adjustable wrench and turn the crank pully nut.
Start by removing the valve covers and THROW AWAY THE GASKET. Scrape any residual gasket material from the cover and head. Apply a very small amount of contact cement to the gasket and to the cover, or use the yellow 3M weatherstripping sealer. Contact cement is cheaper and works as well or better. Wait about 5 minutes and apply the gasket to the cover, cement to cement. Adjust the intake and exhaust valves by loosening the adjusting screw, re-tighten the screw and as you tighten, spin the push rod, it should spin freely, not too loose and not too tight. Once finished, rotate the engine 180 degress counter clockwise. (If you were facing the pully, turn the engine towards the left) 1-4-3-2 firing order backwards is 1-2-3-4 so adjust the #2 cylinder while that valve cover is off... replace the cover and again turn the engine 180 degrees counter clockwise and adjust the #3 cylinder, its the cylinder furthest from the firewall on the right side of the car. rotate another 180 degrees counter clockwise and adjust the #4 cylinder.
Back in the VW days, VW said to adjust the valves every 3,000 miles and change oil every 3,000 miles.