I did some poking around. I'm not sure what you've got going here. Everything I read about the DBW cruise says the stalk is the only possible issue, the ECU does the rest. I see a few posts about guys who swap for a higher ratio 5th grear in VW products and lose cruise because of that. Apparently their cruise thinks they're going up a hill so shuts off.

I can't always tell what car people are talking about on a forum, I don't know if our B5 DBW does that, or if it's related to your problem. I also don't know if your whole 12 mph speed error is the issue, or some tempting, long, dark alley.

Would be interesting to know if a healthy DBW sees that measuring block with the same value as the speedo.

BTW, I'm sure you've been all over the Ross Tech site on this. I don't know how helpful this is, but it's all I saw:

Checking Cruise Control using Measuring Values - Ross-Tech Wiki

 

Here you go:

AudiWorld Forums - View Single Post - How audible is the cruise control module click when CC is set?