hesitation at high RPM

[Dom81]

have never put the electronics off as I think that is insane unless on a track

Don't forget that it's a two stage switch. Quick push just disables TC, whereas push & hold turns off the whole lot (ESP etc.)

In a straight line, you get much less lag under heavy acceleration with the TC turned off, but (as P_G points out) the ESP still kicks in if it thinks the car might be heading off-line

I'm happy to drive without TC (essentially just a wheel-slip limiter) but always keep the ESP active

[Covkiller]

After my new engine was fitted, see above Feb 28 2009, I had the following:
Big flat spot at 4k revs in 4th and 5th. Big speed at these revs. I did have a fault code:

001169 – Secondary Air Injection System Bank 1: Insufficient Flow

Under warranty Audi changed the Air Mass Meter, Secondary Air injection Solenoid Valve N112, and near side top Lambda sensor (giving too much resistance). All is fine now.