Welcome to Passat World!
There is a lot you can do with a 98 1.8t. Just depends how much $$$$ you want to drop into it.. You might wanna start by making sure all the proper maintenace has been done, especially the timing belt. If that goes the car is pretty much total'd. Anyway once the car is in tip top shape then you can start dumping money into mods. New Wheels/Tires, Suspension,APR tuning, Exhaust, silicone hoses, valves,Performance brakes, Tint, Grill. Anyway the list is infinite (and I hope your bank account is too:biglaugh: ). Trust me I aquired a 02 1.8t a couple months ago and about 3 grand later I feel I have hardly scratched the surface for modding. They are great cars but be forewarned they are a bitch to maintain and expensive.. I think there is a thread on here dedicated to the amount of cash people have spend to support these cars.. But don't this disaude you as the reward for a finely tuned, modded Passat is pure fun and a sweet ride.
From my very limited knowladge about Divirter Valves what it does in stead of relaseasing all the boost into the air it holds on to most of it so the turbo can spool faster, am i wrong agian i only WISH i had turbo car.