Type 2 IRS
A common alternative to the Type 1 transaxle is the Bus IRS transaxle. There are two different models of Bus IRS transaxles: the 002 and the 091. The 002 was used in the '68-'74 Transporters and the 091 was used in the '75-up Transporters.
This conversion makes a lto of sense, but not for everybody. The 002/091 conversion, with stock internals, is stronger than a stock Type 1. The bellhousing and clutch parts were designed for the Type 4 engine, so it makes logical sense. No modifying of the flywheel is required.
This all sounds great, but it only makes sense for specific applications. Both the 002 and the 091 feature a really low (higher numerically) ring and pinion. This was needed to help get a rather heavy Bus up the hills. The tallest ring and pinion available on a Bus transaxle was the 4.57, where as the shortest Type 1 was the 4.375. For a heavy Bus or a Baja/Buggy with tall tires, this low gearing is exactly what is needed.
For a street car, this low gearing is not desirable. The short ring and pinion will cause the engine to wind out on the top end and the torque of the Type 4 will mean you will be shifting sooner in each gear.
When it comes to gearing, think of a mountain bicycle; if you shift into the smallest front chainring and the largest rear cog (what's commonly referred to as the "granny gear"), you have a low gear. This low lets you start pedalling with relative ease, but once you get moving, you can't go very fast or for very long. If you shift into the smallest rear cog, it gets taller, but not enough for any kind of speed on the road. Think of the front chainring as the ring and pinion and the rear cogs as your gears. With a bicycle we can change chainrings on the fly, but we can't do this with a VW.
If the short gearing and ruggedness of the Type 2 transaxle are desirable to what you are building, then you will need to look into how to mount this monster into your car. We'll assume you have a Type 1 based vehicle, like a Baja Bug or a dunebuggy.
There are a few ways to mount a Bus transaxle into a Bug. The cheapest way is a kit available from most vendors. It's basically a strap/mount kit with shorter axles. It requires that the shift rod from the front be raised to on top of the center hump or use an adaptor. My experience that this kit is marginal is terms of quality and in terms of performance.
My preferred method of conversion is the Gene Berg converison. GB manufactures a intermediate housing that allows the use of the Type 1 nose cone. This conversion does require the disassembly of the transaxle and is not a cheap method, but it's the most reliable, accomodates power shifting, and retains the stock position of the shift rod and shifter.
Both of these conversions will require shorter than stock axles, but they are commonly available from Sway-A-Way in high performance configuration.
Link til GB kittet..
http://www.geneberg.com/cat.php?cPath=12_363
Og en how does it bolt in
http://www.geneberg.com/cat.php?cPath=12_364 
