What does the SET button do next to my esp?

Sets the TPM (Tyre pressure monitor)

So if I pump them up do I then press the button so it knows what I filled them up to?

So if I pump them up do I then press the button so it knows what I filled them up to?

Yes

Thank you both question answered

How exactly does this system sense low pressure in a tyre? I'm under the impression it doesn't use sensors on the valves and my current car certainly doesn't have them.

Measures the rolling diameter.

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How exactly does this system sense low pressure in a tyre? I'm under the impression it doesn't use sensors on the valves and my current car certainly doesn't have them.

As above, there is no sensor as such.

 

The ABS system is measuring how fast each wheel is turning for the ABS/Traction control system to work anyway. All they have done is added extra software to give you a warning if it thinks the rolling diameter has reduced (Wheel is rotating faster) which is a symptom of a flat tyre

The system installed is an indirect system, much more information here: http://www.my-gti.com/321/volkswagen-tyre-pressure-monitoring-system-tpms

 

It is possible to retrofit the direct system on the FL as myself and Eddie-NL have but it's not cheap

The indirect system won't be useful in case when all tyres lose pressure in a longer time even (let's say - 0,2 bar per month or so).

Had my light on today. Car loaded to bursting all packed for our hols so did pressures to there max for loaded. Forgot to reset before motorway and just as i hit bottom of slip road ping lol. Ended up pulling off to reset as it was doing my head seeing it