Steve, "never" worked long term? There's a guy here in WA with a 109 and a 200TDI i think (might be a 300) and he's been running biodiesel for over 7 years. I'm sure I can find many more. What is long term? I think you're looking only for the negative and finding it, kinda like noticing more Rovers on the street than Camaros (I apologize to anyone who will now be noticing more Camaros on the road).
And your description above is Straight Vegetable Oil and NOT biodiesel. Done wrong, SVO will give you problems like you mention and obviously mess up the injection pump and other things.
As to why, take a look at
http://www.frybrid.com/images/viscosity.jpg and the page it comes from
http://www.frybrid.com/svo.htm . This gives a good explaination of why SVO needs to be heated to a proper temperature before being introduced into the system. Chris, who runs Frybrid, sells systems that are expensive but work well and don't see the same problems as you mention. Incidently, he also did work building up a couple of 110s for National Geographic for a Africa trip at one point. They weren't SVO though, but still TDIs. I've emailed with him and chatted on his forum about SVO in a 300TDI and the overall answer I got back was it'll work with the normal precautions as any vehicle needs.
As to biodiesel.org, while it has some good info, it is also 100% run by the soybean lobbies. " It was founded in 1992 by state soybean commodity groups, " taken from
http://www.biodiesel.org/aboutnbb/whoarewe/ . I'm not saying they are completely evil, just that they will perpetuate the use of less than ideal soybeans for biodiesel when much better crops are available (mustard, for example).
Yes, you need to change your fuel filter after the first couple of tanks with biodiesel as it works as a solvent, scraping off all the crud petro-diesel has left in your system. It's no different than if you took a diesel fuel tank and lines, changed to a gas engine and started pumping gasoline through that same system. The nice thing is you have a cleaner system afterwards. And your engine gets the lubrication it needs from something other than sulpher.
As to fuel lines, biodiesel will break down natural rubber over time. So if your car has natural rubber in the fuel lines or seals that the fuel might come in contact with, they should be changed. As started on
http://www.biodiesel.org/markets/gen/ (see, it's good for some things!
) "Pure biodiesel is not compatible with natural rubber, sometimes found in pre-1994 vehicles. Because it is a solvent, it can degrade natural rubber hoses and gaskets. This is not a problem with B20 blends (20 percent biodiesel/80 percent diesel) and below. "
Biodiesel does have some negatives, like anything. It will gel at certain points (depending on the feedstock) below freezing. it puts out more Nitrogen oxides emissions usually increase slightly, which is a contributing factor to smog.
But there is the postive aspect of it being non-toxic. While it would't be good, if an Exxon Valdez tanker spilled as much veggie oil it would be non-toxic to the workers and the wildlife. While it tastes really bad, it's not lethal like petroleum.
Anywho, use it or don't use it as you like. Just make sure you have the right facts when making a decsision.