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See this VWvortex forum posting: http://forums.vwvortex.com/zerothread?id=2532481. It looks like the keyswitch unit is sealed and therefore difficult to repair. Replacing it should be reasonably straightforward, but time consuming. This other forum posting at the same site glosses through one type of repair: http://forums.vwvortex.com/zerothread?id=3961313 The innards of the keyswitch are plastic (presumably nylon), and wear out after 10 years it seems. Whichever you choose, you'll have to take apart the steering column. It might be worth your while going ahead and repairing the keyswitch.

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Q: Can you fix the electronic ignition switch yourself on a 1998 Volkswagen Jetta Wolfsburg Edition?
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