DSG is the way to go - it's actually more efficient than a regular automatic because it's a manual transmission, just with robotized clutches. For feel, yes, a regular manual will be better.
For tooling around town VW has perfected it - my mom can't tell the difference, and if it passes the Mom test it should be good enough. The TDI comes with DSG, if I'm not mistaken, and the 2.5 comes with the regular automatic.