I have learned so much from the forums here at the org that I thought I should give something back. Since the day I bought my 01 1.8T I have been plagued by the limp armrest. It has extruded more than one profanity from my mouth. During a recent necessary trip to the stealership, I inquired as to the cost of a new armrest. When they told me $413 I almost fell over and politely declined. I immediately came home, consulted the org, then got to work. I used a c-clamp to press the plastic bushings back into place. If you want to keep the little foamy ring in the bottom, feel free to fight that fight, but it is a pain in the butt to get in, I just took it out of mine and it doesn't make a difference. After pressing the plastic bushings back in flush with the metal, I used a 1/8 inch drill bit and a couple of bolts I had in the bottom of the toolbox. I went about a half inch down from the divit that lines up in the side when pressed all the way in. After drilling through both the pieces I inserted the bolt, attached the nut, tightened it down and then repeated it on the other side.

If you use the same placement of the bolts here, you will be able to simply snap out one of the little plastic pieces on the inside of the covers that go back around the base during installations. On the inside of the plastic cover, you will see the circular plastic pieces that snap back inside the plastic bushings we just pressed back in. They are constructed as on solid 3/4 circle then a little tab that makes up the completion of the circle. You will see what I mean, you can just break that little tab off and it will allow for the bolt you just installed and everything will fit back together perfectly. If your cover is like mine, you will be missing all the plastic tabs that connect it back together, LOL! A large zip tie will fix that. I was lucky enough to find a gray one that pretty much matched my interior and isn't noticable, but even if it was, it would be worth it not to have the armrest collapse and rattle everytime I touch it! LOL. Here's another picture of the other side.

Hope this helps someone. Also, I am not a mechanic, so please compare your covers and adjust the placment of your bolts according to how your armrest is made to make it as easy as possible on yourself when it comes time to modify the cover to allow for the bolt you just added. Like I said, mine is an 01, I don't know how the others are made. Oh yeah and I went back in and clipped the extra bolt off with a pair of bolt cutters.
I also took the opportunity to remove all the rubber stuff they covered the inside of these cars with, you know the crap that is always peeling off everywhere. I tried a toothbrush, dish scrubbing pad, and dremel tool with a wire brush attachment on it. Oddly enough, nothing removes it as easily as the human fingerprint! LOL!