You'll never have a better opportunity to do engine maintenance than when the engine is on a stand in your garage. I took mine apart leaving only the head attached, and cleaned everything, replaced all gaskets and seals, replaced all failure items like timing belt and water pump, replaced most fasteners, and most hoses. I took the block down to bare metal and re-painted it. I polished up the aluminum. All this was expensive and time consuming, but my engine was pretty ugly and it seemed necessary. At a minimum, you should replace: timing belt, water pump, front and rear crank seals, rear breather hoses. Here is the parts list for the Full Monty:
 
 
Description
P/N
Quantity 
(x1 unless noted)
Front crank seal  034 115 147 A   
Front gasket  034 115 189 A   
Rear crank seal  068 103 151 G  
*Note* Audi changed design of the rear seal to make the seal integral with the flange.  See Chris Miller's site for more info.
 
Rear flange gasket  030 103 181   
Oil pan gasket  034 103 609 B (x2 if windage tray is planned) 
Oil pan ext. washer 034 103 043   
Flywheel bolts  N 902 061 03  x8
Intake manifold gasket 034 129 717 K  
Fuel injector inserts 034 133 555 x5
Fuel injector gaskets 030 198 031  x5
Throttle body gasket 034 133 073 H  
Exhaust manifold gasket 034 129 589   
Exhaust manifold nuts N 902 002 01  x17
Exhaust manifold washers N 900 955 01  x17
Exhaust manifold studs check for latest P/N -- should be forged, annealed  m8x35 (x16) 
m8x20 (x1)
Turbo to manifold gasket 035 129 589 D  
Turbo to exhaust gasket 447 253 115  
Wastegate to exhaust gasket 857 253 115  
Turbo oiler gasket 035 145 757 B  
            " 035 145 757 C  
            " 035 145 773 D x2
Turbo nuts N 902 891 01 x4
            " 035 145 749  x4   
Relay roller (aka idler pulley) 069 109 243  
Relay roller bolt N 010 368 1  
Plug wire cover screws 077 103 713 A x2
Cam cover gasket 034 189 025 F  
Oil fill cap gasket 059 103 487   
Timing belt 054 109 119 A  
Belt cover shouldered nut 049 109 207 x2
Water pump assembly 034 121 004  
Water manifold seals 027 121 139 A  
Water manfold seals N 028 203 4 x3
Thermostat sealing gasket 034 121 119  
Oil filter bracket gasket 034 115 417 C  
Spark plugs Bosch F5DPOR x5
v-belt (alternator) 034 903 137 A will depend on the ac/alt configuration you choose
v-belt (power steering) 035 260 849C  
 
Additionally, you ought to consider new engine mounts, transmission bushings, a rotor and cap, and new ignition wires, (I succumbed to Magnecor's marketing pitch, their cost is comparable to stock.)

What will the above, combined with some diligent work, yield? See for yourself...
 
before...
...and after