Present car Octavia 2.0HDI CR 140PS (Nov 2010), previous Passat 2.0 HDI CR 170PS (Mar 2009). I have written a review of the Octavia.
I'd echo the advice given by previous correspondents, try to avoid older PS diesels which are noisier with more vibration. Otherwise the newer VAG group diesels are torquey and relaxed at speed.The Passat is longer but not significantly wider, and has more rear legroom. The Octavia is more than adequate in that respect, though, and has plenty of boot space.
I find the hatchback more useful than the Passat's boot, and a rear wiper is also a plus. You may be looking at estates, though.
I didn't miss the 30 PS extra of the Passat but it was quieter mechanically than the Octavia. Low profile tyres on both probably contribute to a fair amount of road noise. I would not like to choose between the interiors for comfort or quality; both were high specification models and nicely finished and equipped. I found the ride on the Passat slightly better (mine had a 3-position choice, normal, comfort or sport) and also preferred the handling depite the slightly longer size.
Some people don't like the parking brake on the Passat; I got used to it quickly and liked it's automatic operation at traffic lights etc. The Octavia has a more normal handbrake. Otherwise there are a lot of common features between the two. If space is important, the Passat gives a bit more, otherwise it may well come down to initial cost and insurance etc. I achieved 46 mpg overall in the Passat and 47 in the Octavia. Good luck.
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