$14,900 including the Scion TC trade-in?!? Is this from a VW dealership? What a rip-off!!!! Also, 20K miles on a 2008 model is alot. That's alot more than the 12,000 miles on average a person drives a year....and that's assuming the owner has had it for a full year...if the previous owner only had it for 6 months and put that many miles on it, then it was driven...alot! You can ask for a CarFax report on the car to see when the car was first registered to see how "old" the car really is and to see how long it took for the last owner to put on 20K miles. And I'm sure the previous owner didn't do much maintenance on the car since it was brand new. I hope he/she followed the owner's manual and at least gave the car an oil change or two. If it was dealer maintained, you can also ask the dealer to show you the maintenance records to make sure it was maintained properly. If they can't show you that, then be wary of the car's maintenance history.
According to Edmunds.com, a used, Certified 2008 Passat with the specs you mentioned goes for ~$21K retail from a dealer and $18500 from a private party. So that means they're only giving you $6K for your trade-in?!? Your TC is worth about $11K if you sold it on your own...and you should get about $10K for a dealer-trade in...if it's in Good condition. If you sold it on your own, you could probably get at least $9K for it if you just want to sell it quick. That would be a great deal for anyone.
Did you mention the trade-in BEFORE or AFTER you got the price of the Passat? You shouldn't mention you're planning on trading in another vehicle until you've negotiated a final price of the car because they will mix the two transactions together into one and you'll get the short end of the stick. They are considered two separate transactions and you should try to maximize on both deals separately as best you can.
As for the Passat, my uncle owns a 2006-07 model and he loves it. He has the wagon version and he says it can hold tons of stuff. The interior is very functional and has the cool red backlit gauges. The turbo 4-cylinder is a huge gas saver too if he restrains himself from stomping on the gas pedal but the power is there if he needs it. I drive a V6 Audi TT and I've driven his Passat before and it does have Oomph! He's only leasing it so he doesn't have to worry about issues with the turbo probably 4-5 years down the line. Just be aware of that when/if the turbo goes, it will cost you a pretty penny to repair/replace.
I'd look for another car. Have you considered buying new? Maybe a Honda Accord or Toyota Camry? Those are similar sizes and comes in 4 & 6 cylinder models.
But always remember...it's a buyer's market right now so don't jump on the deal right away. You don't have to settle for a cr@ppy deal. If you're not satisfied with the deal you're getting, just tell them you're not happy with the deal because 1) you're not happy with the trade-in 2) the car has lots of miles on it. Also, a good bargaining chip is to say you're going to look at other cars as well. That will get them quaking in their boots. Then walk out of the dealership and let them stew on it for a day or so. I'm sure they will call you back to make a deal.
Good luck with your car shopping experience!