Lately I've been having some bad mileage and a little loss in power on my 318. I checked the plenum, looks good and clean on the inside(haven't lost a bit of oil since last change). Everything else seems to be alright but I think my fuel filter needs to be changed out. My owner's manual doesnt tell me where the filter is but I found out it's in the gas tank(correct?) if it is, how much of a PITA has it been for the guys who've done this before?

 

Correct, and Tank has to be Drained & Dropped, its not too terribly bad if you know what your doing.

Replace the pump while you're in there (Its also in the tank).

 

IIRC I think the filter is accually part of the pump.

 

You might be swapping good parts for no reason. The pressure regulator could be clogged with gunk or your catalytic converter could be plugging. O2 sensors should be changed ~50-60K miles. If not, the emission system will slowly "destroy" itself.

Check into those before plopping $300 or so for a fuel pump assy.

 

Checking fuel pressure would be a good idea first, no?

The fuel pump assembly contains the two filters, the inlet filter and the one in the regulator. There's no sense in changing just the regulator and inlet filter (not sure if you can even buy just the inlet filter?) if you're in that far replace the whole assembly with a Denso or Delphi brand fuel pump.
Denso brand is $175 after shipping & discount on rockauto ...not sure where you're buying $300 fuel pumps VW

 

VW-I don't have a cat on mine but how do I check my pressure regulator? Just to make things clear and asking a dumb question, how do I go about checking fuel pressure?

 

Either buy or rent a fuel pressure tester, there is schrader valve on the fuel rail, simply hook up the pressure tester and start the truck, helps if you have someone to start for you so you can watch the tester.

Should build pressure quickly when starting, hold around 45-50PSI I think. When you turn off the motor it should hold some pressure for a while too.

 

you'll want to look at your fuel pressure at 3 points.
ignition on, truck not running. should be around 49 psi, +/- 5
truck running. needle will be bouncing, psi will be some less.
truck off. should hold pressure for awhile and bleed off slowly.

here's an unscientific shade tree method to check fuel pressure.
step 1. put out cigarette.
step 2. turn ignition on for 5 seconds, hear pump come on, then go off. turn ignition off.
step 3. press the valve stem in the shraeder (sp?) valve. if a high pressure stream of gasoline hits you squarely in the face, then your fuel pressure is adequate, and unless you have some more evidence (as in stalling or bucking), then your fuel pump and filter is likely ok. wipe up any spilled fuel...