Well fellas must be an Audi design or Audi workshop fault!
My Jan'01 S3 (only 31,000 miles!) lost it's brakes last Friday a'noon (14 Dec'07), long pedal to the floor, only warning was 'esp' light.
Dribbled 2 miles to local Audi (official!) shop, they put it up on a lift and showed me the leaking pipework below the master-cylinder!
The comment "needs a new brake pipe, it's a bit cramped in there so something has been rubbing (!?), 3 or 4 hours work, we'll order the bits and hopefully get to it Monday"
When asked about this being a (missed?) recall item the reply was "no".
When asked if the replacement part was modified as a "fix" the reply was "not aware but we'll see when we get it".
They did take me 7 miles home, thanks Audi (but a w/e without S3 is a long w/e!)
Comment ... this car was sold and serviced only by Audi.
This is a "SHE" issue! (for those not in Engineering : Safety, Health & Environmental).
1st comment from me : transfer all those plastic engine-bay covers to the back of the garage so you might see faults, including fluid leaks!
I'm sure the's more to follow.
Report to follow!!