Okay if it was me looking for a car, I would definitely get the Passat, or as someone said the Altima.
This is because I am a mechhanic by profession. I work on Audi/VW, Mercedes Benz, BMW, Volvo, SAAB, Alfa Romeo, and most other European imports most of the time. I am an Audi/VW/Nissan fan.
I would suggest against the VW. Not only do VWs use the same parts as Audis, they are both owned by VAG(Volkswagen Audi Group). Now from my experience with these things, I would recommend you steer clear of these cars.
Well, autoshops make a lot of money off of repairs on these. As does VAG. So if you like the styling, and what not, and you don't mind paying a little extra for a german car, go ahead. But be warned, repairs are inevitable on cars and when they come around, its not always just a 300USD tune-up. Esp with an AT transmission.
Now about the Subaru
I hate working on them. Esp in the engine compartment. Spark plugs take forever to replace. I just did a timing belt/water pump, and a full tune-up with a replacement of drive belts on a '97 Subbie Legacy 2.5GT. It wasn't easy. The bill wasn't too bad, but it was quite frustrating working on it. Dealerships often bloat the price on labor for cars like that. So be careful.
The Verdict (at least on my part)
The Nissan Altima. From what I have heard, they ARE fun to drive. Are bigger and come with enough options to make you feel like a Charlie in the chocolate factory. Just make sure you ask the dealer if the oil issue with the VQ35 has been addressed. The VQ35 is the 3.5L engine Nissan has been putting in the 350Z, Altima, Maxima, G35 coupe and sedan, and the FX35 among other cars - yes Nissan owns Infinity and onda owns Acura, just like Toyota owns Lexus. The earlier versions had a problem where the engine would burn oil. So bring this up at the dealership or prepare for costly repairs. Try to get some sort of warrantee.
Do as much research as you possibly can. Include depreciation values and look for people who are dissatified with each car - all it takes is once for something to happen so pay more attention to those ratings rather than the ones that sing praises. Make a list of everything that concerns you when you go to the dealership and make sure they address each problem clearly without trying to cover up. Search at least three dealers for each make and have each set of dealers battle it out to get you the best price. even if you have to drive 20 miles. An easier way is to email dealerships not in your area with quotes from the dealership(s) in your area. Don't let Magazine articles lead you to your purchase. Most things that go wrong in a car don't usually happen within a year or two of initial purchase. That is except for Mercedes and BMW.
I hope this was of some help to you without dragging on forever.