What will the VW Recall of 11 millions cars do?

So VW are signalling a recall of 11 million cars due to the emissions testing scandal.

What can they actually do in the recall? As it sounds like they're going to update the software in the Engine Control Unit (ECU) I think they have two options:

• remove the emission test cheat device - this would means the vehicles would have much higher test values. Would the vehicles then be reclassified for tax purposes? If so, would any taxes be retrospective and who would pay the taxes going forward?
• make emission test cheat mode the normal mode - this would make the cars' performance far worse and I cannot see it being popular with owners.

As the recall is not for a safety issue (well, car driver/passenger safety as the safety of people suffering from NOx pollution seems be being ignored) it seems the recall will be optional. So VW could go for the second option and hope people don't take up the recall offer.

It's also going to be interesting to see the new test results and tax classifications for the vehicles.