I am in the process of fitting a Subaru EJ20 engine to my Manx SR.
The gauges will all be VDO. The water temperature sending units to suit the VDO gauge will not fit into the hole in the engine where the original unit was.

Can I use the old unit from the engine to operate a VDO gauge or will I need to fit the VDO sender into the radiator hose?

might get lucky but most likely different resistance/voltage outputs produced by the senders. And the vdo gauge will misinterpret the stock unit.... you can get adapters etc etc. Just find out the thread and size of the stock unit and get an adapter.

all you need to do is find out what resistance values the gauge requires to operate and match it to the sender unit you will be using.
If you cant fit the new sender in the hole in the engine then adaptors will only add distance from the engine block and a dead leg that will cause the temp response of the sender to be sluggish and lagging the actual temp changes by an unknown value... ie if the engine temp is actually 100deg then the sensor may read 95deg etc etc... so it is best to mount the sensor into the correct hole for it in the engine block.
The sensor is purely resistive.. so if you have a multimeter and a decade box then you can test both the old sensor and the gauge for the operating ranges...