We had high hopes for the Volkswagen Touareg when it arrived here. After all, this all-terrain machine was codeveloped alongside the Porsche Cayenne, leaving no doubt VW was serious about becoming a major player in the SUV market. The results were impressive, so much so that we awarded VW's first effort in this category with Motor Trend's 2004 Sport/Utility of the Year and a few months later took one into our long-term test fleet for scrupulous evaluation.

At launch, the Touareg was offered with two gas engines and one diesel V-10 (emission requirements had canceled the torque monster, but now it's been reported VW will be bringing it back). It's available with a low-range transfer case, locking differentials, and driver-controllable air suspension to adjust ground clearance. All this plus attractive styling, premium interior materials, and a sizeable cargo area quickly put the Touareg on the top of many SUV-crazed shopper's lists.

The real-life practicality of any moderate-size SUV means it doesn't spend much time sitting idle in our parking structure, and the same held true for our Touareg. Lots of commuting and weekend errand running easily revealed its strong points and a few weaker ones. Just about everyone who drove it complained about the abrupt throttle tip-in and that the transmission hung onto a gear too long when upshifting. Hesitations during downshifts were common, and the electronic assist brakes proved difficult to modulate. An intrusive all-wheel-drive setup, touchy drive-by-wire system, and non-linear brakes further made it difficult to drive smoothly around town. We're also baffled as to why the nav system doesn't display street names on the screen. The map is colorful and features helpful graphics, but the lack of street names makes it difficult to use for getting around unfamiliar neighborhoods-kind of the whole point behind having a nav system to begin with.

Once up to cruising speeds, however, the hiccups disappear, and the Touareg is responsive and smooth. Not surprisingly, with 310 horsepower and a 5400-pound wet weight, highway miles click off with ease, and the Touareg feels stable and solid (even at near triple-digit speeds). We found the interior a comfortable place for five, and road noise is minimal.

On many occasions, the ski addicts on staff pointed the Touareg toward the slopes at Mammoth Mountain, in Central California. One editor even decided to explore an unplowed, snow-covered road only to find himself stuck 100 yards from the highway. The VW's stock tires were clearly not up to this icy job, and it took several hours of shoveling to put the Touareg back on the road. Remember, 5400 pounds. In fairness to the Touareg, this was more a case of errant judgment than vehicle weakness.

Other off-roading opportunities included an exploration of California's Anza Borrego state park where we had numerous occasions to exercise the Touareg's low-range gears and locking differentials. When the trail conditions turned nasty, low range could be selected and the center and rear diffs could be locked all at the turn of a few center console-mounted knobs.

The Touareg's interior features a center stack with a sea of buttons that operate the radio, HVAC, and nav system. Although some of us felt these buttons confused rather then helped, most considered them a suitable addition to one of the most stylish and trendsetting interiors in this segment. The integration of wood, metal, and premium plastics adds up to the perfect example of what a luxury SUV's interior should look like. Unfortunately, some of the interior plastics (particularly around the door grabs) began to lose their rubberized finish, resulting in replacement under warranty.

Whereas other recent Sport/Utility of the Year winners have featured groundbreaking methods for collapsing their second-row seats, the Touareg's second row features the old-school, flip-and-fold method that at times was almost impossible to complete without breaking a sweat. It also requires the headrests to be removed before folding. Volkswagen could take a look at Volvo and Land Rover here.

The Touareg's on-road grip is impressive for an SUV of this size and capability, but that roadholding comes at a price, as we learned when the tires on our Touareg needed replacing at 14,000 miles.

Volkswagen deserves applause for delivering an SUV that can just as easily climb a slippery rocky slope as it can make record time to and from the outlet malls, looking good inside and out while doing it. As with most heavy trucks this size, agility and gas mileage aren't strong points. On the whole, though, this was a good, hard-working year for VW's first-ever sport/utility, and we're certain the second generation will address our issues.

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