1998 Passat 20V, 116K miles. Oil pressure warning

Ok, first thing to do is to spend the $10 for a manual oil pressure gauge, available at any parts store. Hook the gauge up to the port where the oil pressure sender is, and see if it acts the same way as your original gauge did. You can even place it inside the car if you wish, mounting it either permanently or temporarily, whatever your wish is. You may need an adapter to make it fit the port, available at the store that you bought the gauge from. If it doesn't act the same, you have the choice of keeping the added gauge, or having your instrument cluster checked out and repaired(which can get expensive). If you are indeed having oil pressure issues, then you could be suffering from a filter that's too restrictive, a faulty oil pump, or need to go to a thicker oil, given the higher mileage on your car.