From the sounds of it the HS wouldn't fit your lifestyle I'd go with the A3, I played around with the TDI @ the LA auto show and drove a friend's 2.0T and I really liked it in both cases. It might just be my favorite Audi But as a disclaimer I have to admit that I really like hatches

As far as reliability goes, my friend has had his 2.0T since 06(?) and the only problem he has had was a cracked front lip from a tire tread...

 

I went for a short test drive in one and while it was fun I was a little disappointed. The interior did not feel as nice as an A4 (similarly priced I might add) and did the ride was not as comfortable. The ride in my 3 series is much better and my doors felt much more solid (perhaps because I have a coupe with heavier doors).

I will be looking closer and taking a longer test drive on this car once I get closer to being ready to buy. If the rates aren't that great, I might get an A4 instead or even a 335D.