Roger
Most of my problems concerning trailer lights have been related to poor earths. In my experience trailers have a point where the wiring is connected to the trailer and this wire goes back through the loom to vehicle's ground. In the past it's just been a matter of cleaning up the connection point.
I have a Tekonsha Voyager in my R5, wired through the factory fitted connection, and have had no problems other than the occasional trailer lights warning on the dash. I generally ignore the warning because experience has shown the lights to be working.
Anyway to assist in fault-finding, do the logical thing, divide the circuit in half, meaning disconnect the trailer plug and connect a test plug or use a Voltmeter to check that the appropriate signals (no pun intended) are coming through at the Treg. You can use a LED checker as the Touareg's system gets confused. Next try your trailer on a another vehicle. It doesn't have to have a brake controller, you're only interested in whether the lights work correctly. If all else fails goes back to the last known good condition ie disconnect stuff one at a time until you get a good result.
Cheers
Bob Z
