i think romano is on to something here. tyre pressure and tyre size (along with wheel offset) make a HUGE difference to the ride. I have 185/65R15 up front and 195/65R15 in the rear of my super and the ride is ALOT stiffer than a stock beetle (even though the 702 tyres have pretty soft sidewalls). the incorrect front wheel offset also causes my steering to wander a little and the heavy rim with fat tyres cause the front suspension to "crash" alot. i've recently changed ALL suspension bushes to urethane ones as the old ones were torn to shreads by the wheel setup. the upgrade made a HUGE change.
also you should check your new shock absorbers as it is possible that they are too hard or too long and that is why it is causing your car to be so hard. It could also be that your torsion arms are set too "high" and are stressed alot which could also cause the car to feel stiff (have them opened, reset and greased correctly). can't help you on the front suspension as i'm not too familiar with a non-superbeetle setup.
Remember, the stiffer the suspension the more the bumps are transfered to the chassis, and if you have a soft chassis (like every beetle) then all the forces are tansfered to the cars chassis. This is why it is always a bad idea to increase the loads on the suspension of any car by fitting larger wheels & tyres as well as anything else which increases unsprung weight or loads which the car was not built to deal with. the only way to rectufy this issue is to stiffen the chassis with roll cages and strut bars (in the case of supers).
Believe it or not, when I swapped out the toyota rims (wrong offest and too wide) on my 1303 to the EMPI rims i felt a HUGE change in the ride as the EMPIs are MUCH lighter, correct size and have the correct offset for the car. I can only imagine what it'll be like to drive once the fronts are fit with correct size tyres (rears will stay 195s)
the correct tyre pressure is 19 up front and 27 at the rear, and 165's are 5.6x15 (if i recall correctly)