Here's an article on lowering a Super Beetle courtesy of ACVW;
There are various ways one can lower the front out a VW:
Install a set of adjusters.
Cut-and-Turn (not recommended these days).
Turning the front torsion arms up (or down) one or more splines is another method (if not mistaken, the type III's use a torsion arm front end?). The way NOT TO DO IT is to remove torsion leaves! If you've gone through all the trouble of removing the front end just to remove some leaves, you might as well get an adjustable front end and bolt that in instead!
I won't go into great detail on how to install a set of adjusters as today you can purchase a complete front end assembly with the adjusters already installed. A complete set will already have the torsion leaves and arms installed (and in some cases, the steering box and spindles along with the tie rods will be installed). The inexpensive version will require you to transfer the leaves from your old housing into the new (this is fun, the instructions say to tape the leaves together to help aid in installing the leaves ... ever try to make tape stick to grease?) as well as the arms, tie rods, steering box and spindles. It's a chore, but it will save you anywhere from $100 to $200 bucks assuming all your old stuff is still good.
Installing a set of shims is also highly recommended; it will help keep the front end from "wandering" from left to right at high way speeds (really anoying!).
Basically it goes like this:
Raise the front of your Bug up and support it on a pair of jack stands. Removal of the gas tank is needed, so it's best to drain it first and remove it prior to raising the car.
Tip: Now's a good time to replace that filter! Also check for any rust and remove them now while the tank is out!
Be sure to remove the speedometer cable as well as the wheels. You can leave the brake drums/discs in place at this time but you will have to remove the brake lines.
Disconnect the steering column (refer to your shoppe/repair manual) and the steering dampner at the bracket.
Remove the tie rod end nuts on the ling tie rod. Remove with steering dampner attached. Now remove the two top bolts.
Loosen (not remove) the four bolts that secure the torsion arms to the pan and place a floor jack under the assembly. I would recommend having a helper help out at this point of the operation as it's a trick to remove said bolts and balance this thing on the jack while trying to lower it. I had two other people help out when I did my '69.
Installation is in the reverse order and be sure to get that front end alignment checked!
Once you have the adjustable front end back in your ride, all it takes is an allen wrench to adjust the height of your ride! Most adjustable front ends will bring your ride from stock height down to as much as four inches! With a set of lowered spindles, you can get it down to as much as 6.5 inches! Now that's *low*. When lowering the front, you might want to consider lowering the rear end to make it complete. That's entirely up to you! When I installed the adjustable front end in my '69, I bought a new, complete, adjustable front end. I probably paid way too much for it, but what I got out of the purchase was:
New TRW steering box. New tie rods. New spindles and ball joints. New steering dampner (Bilstien).
The first thing I noticed was the new steering box. Steering was much more responsive and had virtually no play in it ... it felt like a new car. Installation took about 4 hours to complete with the aid of two of my friends.
Now here's the saddistic way of getting that lowered stance, and that would be the cut-and-turn method. Though it's "cheap" and you will need the aid of a welder, all I can say is that you better measure correctly as there's really no turning back (you better be happy with the end results!).
Back in the "early" days, this was the only real way to lower your VW. Porsche's had an adjustable front end called "Avis adjusters".
Which spawned the idea and question as to if one could be welded into a VW front end. Or at the very least, have a clone made for the VW's only.
Some of these are still on the road today and they work just as well as the modern version. The modern versions are just "smaller" and "cleaner" looking.