It's the varriable camshaft unit. Cool little bugger, helps the fuel economy Vs. engine power problem, but having one makes it hard to tune the engine.
I've heard of sticky vanos units before, and this sounds legit. The VANOS unit is under a usually unpainted metal piece on the engine, open the hood up and it's right in your face.
Here's a isometric view from the front passenger corner of the car:
... Fun stuff....