From vw-resource.com:
Questions are often asked regarding the need to polarize a generator. If the generator is charging (the battery stays charged) then you don't have to polarize it. When a generator has been left unused for a long time (months or years), the metal core looses it's magnetism, and it NEEDS a little residual magnetism to start the charging process. Polarizing just gives it enough "boost" in magnetism to start it charging properly. When it's being used, it keeps its core polarized core so no need to do it again.
Note: Why do generators need to be "polarized"? Automobile generators need some magnetism to get started. This "residual" magnetism remains in the field pole pieces even after the engine has stopped. The next time the generator starts up, the residual magnetism creates a small voltage in the armature windings. Not enough to charge the battery, but enough to allow the field windings to draw current. As the field current increases, the pole pieces create even more magnetism. That makes even more voltage in the armature, and the cycle continues until the generator is capable of producing maximum output.
What happens though to a generator which has been stored a long time or is freshly rebuilt? The residual magnetism may have decreased to the point where it can no longer get the generator started producing voltage. In the case of a new generator or one which has been mis-treated, the residual may even be of the wrong direction (North and South poles reversed). Polarization is a simple process used to restore the field pole residual magnetism and ensure the magnetic direction is correct.
To polarize a generator, connect a jumper wire from the (DF) terminal on the generator to the generator frame. Remove the fan belt, then connect a wire from the positive terminal on the battery to the (D+) terminal on the generator. The generator shaft should start to spin.
Note: Don't run the generator this way for more than a few seconds to avoid overheating.
The generator will now be properly polarized. If the generator did not spin during this process, the generator is most likely defective.
Put the fan belt back on and re-test the generator voltage with the (DF) terminal grounded. If the output voltage is still low, the generator is defective.
Note: Voltage regulators do not need to be polarized -- they are not polarity sensitive. Even if voltage regulator came with instructions to polarize it -- these instructions actually polarize the generator, not the regulator. The regulator manufacturer simply wants to make sure that your generator will work properly so you don't blame the voltage regulator.
Neither to alternators need to be polarized. Alternators use a trigger current to start the process of charging - electromagnetism, so don't need any internal magnetism to begin with, like a generator does.
That trigger current is supplied via the alternator dash light (it's a tiny current and won't make the light glow when the engine is running) so if that bulb blows - the battery won't get charged and it will go flat. Curious circuitry VW used, but it works just fine. So that means that with an alternator equipped VW, you should always glance at the dash as you turn the key and make sure the Alt light does glow with just the key on, just to make sure that that circuit is intact.