The engine in the pic has the 'early' type connectors on the temp senders/switches which use a simple spade terminal.
However the engine in OP's signature is a 1990, which surely would have used the 'late' type rectangular plastic connectors ?
I suspect the vehicle may have had its engine replaced with an early one at some point, and they just left the early metal flanges with their screw-in senders on the engine, and bodged the late-style harness connectors (cut them off) to work with the early senders.
'Late' wiring diagram is here:
http://syncrosport.com/info/wiring/VW_T ... _KY_JX.pdf
In any case, the yellow/red wire is for the temp gauge, the blue/white wire is for the glow-plug relay in the junction-box. Each of these connects to a sender on the coolant flange, the sender is the same for each of these circuits so it doesn't matter which way round they're connected. Each would have had a brown earth wire, which is redundant if the early-style single-pin senders are being used, as they earth through the engine block. Just make sure the engine harness earth is connected to the chassis or engine-block somewhere and you should be fine.