tlee55, it's funny you say that. In driving a few 1-series, I've found them to feel better balanced, but lacking compared to the GTI in other ways. I think the 1-series (both the 128 and 135) are a step up from the GTI in power (especially the 135, of course) and balance at less than 7 or 8 tenths (just how it feels going around a corner).
They're great cars, but based on my test drives, there's no way I'd take a 128 without the sports package over my GTI. I'm waiting to see if a dealer near me gets a 128 with the sports package to take a test drive, but if that doesn't happen, I think I'll be taking a step back from the GTI's interior to get in something more sporty (probably a BRZ Limited... I obviously don't care a bit about straight line speed).
dtraill27, I obviously don't own a 128, but I'd be surprised if it were to beat the GTI on fuel economy. I've done ~48,000 miles in 2.5 years (~80 miles/day), and have averaged 27.3 MPG (not highway, mostly 45 MPH backroads, and I probably still drive like a 16-year-old, hah). I personally wouldn't care if it were a little lower, but I wouldn't expect a 3.0 liter inline 6 to go up in mileage.