The performance package also know as PP available on the MK7 contains three items.
1. Bigger brakes: In general the bigger the rotor diameter the more effective the braking. These are the same brakes you will find on the Golf R and the Audi S3. The rotors are larger in diameter both front an back than the standard brakes on the GTI. The normal rotors are 12.4″ vented front and 10.7″ solid rear. While the PP package has 13.4 vented in the front and 12.4 vented in the rear. Vented rotors allow air into the middle of the rotors cooling them down more effectively. These are some awesome brakes and make a big different, you will definitely notice them on a test drive. That being said both setups use single piston calipers pushing that pads against the rotors.
2. 10+ HP: Dont get too excited over this, 10hp is a barely noticeable difference. Especially when its 210hp vs 220hp. There is no hardware associated with the increase its all software tweaks that are done to achieve this. The 10 extra horse power is completely negated once third party performance software is loaded on the cars computer.
3. LSD: THIS is the reason to get the Performance Package. This is an electronically controlled Limited Slip Differential, well technically a VAQ (Electronically controlled Locking Differential). What a LSD does is allow each of the front wheels to rotate as slightly different speeds. This is especially nice when taking higher speed corners and adds a lot of smoothness to the handling since the wheels can move at the appropriate speed individually around the corner. When taking a corner the inside wheels doesn’t need to rotate as fast as the outer wheel because the inside of the circle is shorter than the outside. Having the ability to rotate at different speeds reduces drag and smooths out the cornering allowing less chances to lose grip which doesn’t trigger the ESC (Electronic Stability Control) as much. In most cases LSD are mechanical but this one gets its information from the cars ECU (computer). Here is a video from VW talking about it: https://www.youtube.com/watch?v=HQqh2Tv5Puc
Do you need the Performance package? Chances are you do not as these are mostly “track enhancements” rarely needed outside of track environments. You probably wont be going around corners fast or aggressively enough to need the LSD, the brakes sure stop faster but the normal ones are no slouches either. Being vented in the rear helps with brakes cooling down reducing brake fade but most braking is done in the front which is why the rotor diameter is bigger there. And as mentioned the +10hp is negligible and barely noticeable. So no you probably wont need it but you sure will want it!