Understeer is a situation where you attempt to turn a corner and the car wants to carry on in a straight line. It's caused by a loss of grip from the front wheels. Understeer can be caused by several factors. The suspension geometry (by the manufacturers engineers), Tyres, or by simply entering a corner too tast. The revision 2+ Mk2 tends to understeer easier that the revision 1. A popular solution (if you dislike understeer) is to fit a wider front tyre. 205 width instead of 195 width.

Oversteer is caused by loss of grip from the rear tyres. As you steer through a turn the back of the car slides outwards, causing the car to turn sharper than expected. Oversteer is less forgiving to the unexperienced driver and is the most common cause of 'spins'. Controlled oversteer can be spectacular and is the driving force behind 'Drifters'.