The Good: Handling, power, and suspension all come together to make the 2008 Volkswagen Touareg 2 V8 a very enjoyable ride, and its off-road gear makes it suitable for the back country. The back-up camera helps immensely for reverse maneuvering. The Bad: The Touareg 2 V8 suffers from poor gas mileage and probably the worst factory-installed navigation system we've seen. The only CD player is a changer in the cargo area. The Bottom Line: The 2008 Volkswagen Touareg 2 V8 costs a lot to buy and a lot to run, but, while its cabin tech sucks, it drives extraordinarily well. Photo gallery:2008 Volkswagen Touareg 2 V8 FSIAs we pulled the 2008 Volkswagen Touareg 2 up a rocky slope for its photo shoot, we started thinking about taking the car through even more hostile terrain, such as out near Moab, or from San Francisco to Dakar. With the Touareg's four-wheel drive, lockable center differential, and adjustable ride height, it seems as if it can handle all obstacles, slopes, and surfaces. But we were restricted to paved roads during our time with the car, which we didn't really mind as the leather interior, comfortable ride, and modern exterior are perfectly at home in an urban environment. Unfortunately, the urban environment also reveals one of the Touareg's major flaws, as fuel economy drops close to 10 mpg with our V-8 version. The cabin gadgets in the Touareg are also a major problem, as it has the worst factory-installed navigation unit we've seen. And, although the stereo sounds decent enough, its ridiculous configuration when the navigation system is present really doesn't improve matters. Test the tech: Back it up One thing we like about this new iteration of the Touareg is that it has an excellent back-up camera. This camera not only shows you what's behind the car, it provides a set of graphic overlays that show how close the car is to any obstacles and the path it will follow depending on how the wheels are turned. We last saw a similarly featured back-up camera in the 2007 Audi A6. To test that one, we drove it in reverse through a short slalom course. The yellow lines show our path according to how the wheels are turned.For the Touareg, we came up with a couple of new back-up tests. We called the first one The Back-up Squeeze. For this test, we set up cones to simulate a very narrow alley, only a couple of inches wider than the car. Editor Wayne Cunningham and staff contributor Mike Markovich each tried to reverse through the cones by using only the back-up camera. Cunningham went first, reversing toward the cones and correcting the position of the car by using the green lines, which define the area straight behind the car, as if the wheels weren't turned. He lined it up where the green lines were between the cones and reversed through, making it by the first set of cones. The last set proved a problem, though, as the car brushed against the right rear cone. Markovich then took a turn, starting from the same spot as Cunningham and maneuvering the car backwards. Once he lined it up with the cones, he reversed, and though he did a better job than Cunningham, he still kissed the right rear cone. Both contestants were willing to conclude that the lines on the back-up camera needed some calibration. For the next test, we set up our cones to describe a 90-degree left turn, through which both contestants would have to reverse. Cunningham started it off, choosing to attack the turn from the outside. But this tactic put the inside cone outside the field of view of the camera, forcing him to guess when he should start cutting the wheel to pull the turn. He waited too long, and backed over the outside cone. Markovich went next, choosing to hold closer to the inside cone. But he cut it too tight and ended up running over the inside curve. We concluded that turns are much trickier, as the camera only shows what's immediately behind the car. Just to prove our course was possible, Markovich made a second try, successfully negotiating the reverse turn. A cone gets run over during the 90-degree reverse turn test.For our last test, we repeated the reverse slalom course we had run with the Audi A6. Again, Cunningham went first, choosing to reverse with some speed, forcing him to make sharp turns at each cone. This tactic worked for the first three cones, but he couldn't pull the last turn and ended up running over the final cone. His raw time was 34 seconds, but we adjusted upward to 44 seconds, reflecting a 10-second penalty for hitting the cone. Markovich again followed and choose a lower speed, trying to thread the slalom closer to each cone. There was a suggestion that he scraped the third cone, but as we had no judge on that side and the cone was still standing, we let it slide. He made it through the course with no penalties, for a winning time of 38.4 seconds. In the cabin We felt good stepping up into the driver's seat of the 2008 Volkswagen Touareg 2. The cabin offers plenty of luxury amenities, making the interior feel comparable to that of its platform-mate, the Audi Q7. The sienna brown leather seats are power adjustable, complete with electric lumbar adjustment. The power windows are all one-touch up and down, while the headlights have an automatic setting. And one new feature we particularly like is the rich display between the speedometer and the tachometer, showing a compass, the trip computer, or audio information in rich detail. The navigation system forces you to start by entering the street number, then the street name.But the center stack held the navigation system we've seen in other Volkswagens and have come to deplore, not just for how it works but for the weird configuration it forces on the car. The unit itself suffers from incredibly slow graphic rendering, so that when it's zoomed in all the way, the onscreen position lags behind the actual car position, making it easy to miss turns. Destination entry is also difficult--we found that trying to enter a destination on the map is nearly impossible because of the rendering problems. When entering a street address, it first asks for the street number, then the street name, followed by the city. The problem here is that if you don't know whether the thoroughfare you want is labeled as "way," "avenue," "street," or any of the other possibilities, you may not be able to find the street name in the right city. The system should ask for the city first, or give you the choice of which to enter first. Our other problem with this navigation system is that if you choose it as an option, it does weird things to the stereo configuration in the Touareg. With navigation present, there is no CD slot in the dashboard at all. The only way to listen to CDs is to go back to the cargo area, remove one of the interior side panels, and access the six-disc, cartridge-style changer. As this changer doesn't play MP3 CDs, you will be stuck with a very limited amount of music. The stereo does include satellite radio, and we made a lot of use of the auxiliary jack in the console during our time with the car. With the navigation system occupying the dash, the CD changer moves to the cargo area.For audio quality, our Touareg had optional Dynaudio speakers, a component of the system we enjoyed so much in the Volvo XC70. But while we liked the clarity of the audio from the speakers, the audio system in the Touareg didn't seem to have much of an amp to back it up. The sound didn't come through with much strength, although it could get quite loud. Bass was particularly lacking with this audio setup. We discussed the usefulness of the back-up camera above. The parking system also includes distance sensors that illuminate lights on the dashboard to show how close you are to an obstacle. Bluetooth cell phone integration isn't available on the Touareg 2, nor is iPod integration. Under the hood The 2008 Volkswagen Touareg 2 comes with a choice of three engines, a 3.6-liter V-6, a 4.2-liter V-8, and a massive 5-liter V-10 diesel. We had the middle option, the thirsty V-8, which uses Volkswagen's FSI direct-injection technology. This engine gives the Touareg plenty of push, providing 350 horsepower at 6,700 rpm and 324 pound-feet of torque at 3,400rpm. Volkswagen says the Touareg 2 V8 can get to 60 mph in 7.6 seconds, but we assume that's using the manual mode on the shifter. When we punched the gas with the transmission in Sport mode, the car accelerated at a leisurely pace. But while straight-line fast starts don't seem to be the Touareg 2's forte, we enjoyed its stability on winding mountain highways. Underway, the six-speed automatic transmission's Sport mode did an excellent job of downshifting before corners, then holding a low gear as we stomped the gas on the attack. The transmission also has a manual mode, but there are no paddles, only the shifter. We were quite happy with the automatic sport mode. We like these suspension and off-road controls, giving the Touareg 2 the ability to handle all sorts of terrain.The car offered a lot to help us out under these circumstances, including a suspension that could be set to Sport, Comfort, or Auto. The steering is very responsive, with some predictable understeer. During one long drive up the California coast, we frequently got stuck behind slower traffic as the Touareg 2 prompted us to drive with gusto, looking for any opportunity to test out the on-road performance of its four-wheel-drive. But we were also impressed by the Touareg 2's off-road gear. Beyond its four-wheel-drive, it also has automatic differentials that can be set to high for normal road driving, low for light off-road, or you can lock either just the center or both the center and the rear, keeping torque at all wheels. Not only that, but you can use the air suspension to set the Touareg 2 for a low or high ride height, the high setting intended for better clearance. The controls even include a button to lock the high ride height, to make sure the system doesn't suddenly decide it can lower the car down into a stream or onto a boulder. Unfortunately, the Touareg 2's size, running gear, and powerful V-8 come at a heavy price. Fuel economy for the Touareg 2 is rated by the EPA at 12 mpg city and 17 mpg highway. Ouch! During our time with the car, mixing driving between the city and highway, we achieved 13.4 mpg, pretty much in the range tested by the EPA. For emissions, the Touareg 2 is nothing to write home about, getting rated as a LEV II, the minimum rating acceptable, by the California Air Resources Board. In sum Our 2008 Volkswagen Touareg 2 V8 FSI came with a base price of $48,320. We added the air suspension at $2,750, rear differential lock at $700, the $3,350 Technologie package, which includes the navigation system and the disc changer, and the $3,400 Lux package, bringing in the Dynaudio speaker system and a smart key. Our total, with the $680 destination charge, came up to a whopping $59,200. In our ratings, the Touareg 2 scores low for cabin tech, being only partially redeemed by the Dynaudio speakers and the cool back-up camera. It does markedly better in performance tech, giving us a ride we liked and apparently serious off-road capability, but takes a hit in this department for low gas mileage. Volkswagen has a new navigation system on the way, which we've seen at a few auto shows, the addition of which to the Touareg would improve matters greatly. For the price of the Touareg, you get pretty close to a BMW X5, although that car doesn't seem as capable off-road, unlike the less expensive Land Rover LR3, which makes a worthy alternative to the 2008 Volkswagen Touareg 2.