Here is another thread, it seems like the smoke is related to poor quality fuel
There are approximately 640 2006 V10 Touaregs sitting in storage at VW facilities across the US. They came into ports earlier this year to be launched in June. However, the V10's are now equipped with particulate filters (not urea filter) and when existing high sulfur fuels are used the particulate filter does it's job blowing white smoke from the exhaust. Since this would be alarming to both the owner and those around the vehicle VW chose to delay the introduction until Sept. So the 2006 V10's will sit waiting for ULSD to hit the market in volume which is expected to be September. BTW - The 2006 V10's were able to meet the 2006 heavy vehicle (over 6000 lbs) emissions standards in all 50 states and thus will be available in even the CARB states until the end of this year (2006). This is a big deal if you want one legally in these 5 states.
'07 Touareg Diesel? - Page 2 - TDIClub Forums