Hydraulic lifters / tappets explained
This website explains the workings of the VW hydraulic tappet or lifter.
It also explains the method of adjustment and maintainance.
Ghost123uk added this from ajsimmo of the well reputed "Campershack" in Grantham =
The quick way is:
Remove both rocker covers turn engine by hand to No1 TDC, (remove dizzy cap and check rotor arm pointing at No1) adjust both valves on No1 Turn engine backwards (ACW) to No2 - adjust No2 Go to other side, turn engine backwards to No3 and adjust it, same again and do No4. Rocker covers back on and dizzy cap on - you're done. Fire her up and listen. If they were way out it may take a while for them to self adjust (pump up or bleed down as applicable), and your engine should quieten to that lovely Boxer burble. :D
PS I always make a note of the number of turns out when backing off, to compare with the correct setting of 1.5 turns in from just touching. You'll then know which were out last time if you have any problems in the future (eg helps spot a lifter on the way out, unusually rapid wear in valve train, adjuster head "mushrooming" or valve seat recession).