The aim of this exercise is not about power or speed, not your heavy Rover V8, the thirsty Mazda RX7, the old Lancia Twin Cam, the Mortgage requiring Corvair, but more about finding a modern solution. This is where the Subaru really comes into its own, as it uses a water cooled flat four engine, with pretty much the same one used over its entire model range, meaning that there is a plentiful supply. The conversion is certainly not straightforward though, nor for the faint hearted, and there are some serious negatives that must be considered before you hit eBay looking for some bits.
Negatives:Well the most obvious one is the radiator. There are no more modern air cooled engines around, so any engine swaps you are looking at are going to involve finding a location for a radiator and the associated plumbing that goes with it. On a positive note though, you will also end up with a heater.
The engine is a very compact flat four, but as you can see from this picture, the sump underneath hangs down a very long way. Its not just a matter of chopping the lower 3 inches out either, as that can reduce the oil capacity by a significant amount. There are companies that will provide a modified sump and internal oil pick up, but these are not cheap and something that needs to be researched and factored in to your costs.

You will also need to have a bespoke exhaust made. This probably isn`t that much of an issue for us though, as most of us have already ditched the stuff available off the shelf, and have opted for bespoke systems from the likes of Beelzedub anyway.
The wiring is probably the bit that is commented about most. Everything, and I really do mean everything on the Subaru is controlled by a central Engine Control Unit (ECU) and this little box of tricks can have in excess of 100 wires going to it. The engine is quite complex with various crank and cam sensors, so it is no surprise to find that most of the wires will be used. If you source an engine on its own, then make sure that you also grab the ECU and all of the associated wiring looms. There are companies out there that will take your own loom, chop out everything that is not needed,and send you back a plug and play loom like this for around £400. I do have a few issues with this loom though, and that will become clear as the project moves forwards.

And finally, you will need to find a way to attach it all to the VW Gearbox and make it work. This will entail some form of adaptor plate, a modified flywheel and a heavy duty clutch system. All of which are readily available (mostly from the USA) but there are still a few pitfalls to watch out for.

From what I have read, the total conversion cost (excluding labour) can be done for under 2 grand. Not sure how accurate that is, but I guess we will soon find out in the months to come.
Positives:OK, so why would we consider it then?
The Subaru engines are very reliable, and have a good supply of spares that are readily available. They are significantly more powerful than the air cooled engines and will return a far higher MPG thanks to modern technology. There are a few added bonuses too, such as the ability to have a heater and an alternator as standard. They rev a lot higher than the old air cooled motors do too. Imagine the extra performance and speeds you could have if your engine went up to 6500rpm instead of topping out at 4500rpm?
And whilst £2K is by no means a cheap solution, you wouldn`t actually get that much for your pound if throwing it at an air cooled lump, so in some ways it could actually be seen as good value for money and a viable proposition.