Just found this site on VW diesel development:
http://www.greencarcongress.com/2005...roduces_t.html
It does seem to point the way towards smaller diesel engines which are more dependant on multiple turbo charging stages. The problem is how to ignite the charge which, when intercooled, does not achieve the same temperature prior to combustion. The VW solution is to use spark ignition (at lower power settings).
At some point turbo-diesel development will begin to challenge pure turbines for aero applications...
Mart