OK, this is driving me mad.
1974 Beetle, turn the key, nothing..
I removed the starter motor and when hooked up to power it spins, so no problems there that I can tell.
So I get a multimeter onto the big red cable under the back seat, and when the ignition key is turned it starts showing voltage, as far as I can tell
that is the cable that goes to the solenoid thingy on the starter.
So now I'm really confused 
ignition barrel?
nope, Ive checked the barrel 
bah, just went out again with a multimeter and hooked it to the wire that goes into the starter solenoid, when i turn the key it jumps up to battery voltage, so maybe it is the starter motor, just puzzled why it worked when I had it out of the car. Mind you it didnt seem to spin all that fast
even though it may show the battery voltage,
if the ignition barrel/switch is worn out [and most of them are] You need to place a relay next to the battery or near the starter motor...
so the power going thru the ignition switch is usually enough to power a relay..
then all the power comes straight from the battery thru the relay to the starter motor..
another way of trying the starter motor..
This can be Dangerous...
so be careful... Handbrake ON
car out of gear -
jack up the RHS side rear of the car
then using a heavy screwdriver - touch the end of the screwdriver onto the large NUT the cable goes to and
the small contact at the same time...
If Your engine is OK..
and the battery and starter motor is OK
the engine May start...
Cheers
Lee
PS: I have started My beetle [auto] in gear many times..
from under the car.... not recomended..
i had the same problem so i done the start it with a screwdriver thing and it worked so i found out my ignition is screwed
check ya earth from the batt too..
Brass bush in bell housing could be damaged????????
when you turn the key is the starter solonoid clicking in and out showing that the ignition switch is working or is there nothing happening at all ?
it will be the lower half of the ignition barrell its a plastic section with springs n contact point in it ( not the key bit ) they collapse and deteriorate over the years get a new one
Nothing happens at all when I turn the key, I don't even hear the solenoid click, and when I hooked the solenoid cable directly to the battery
nothing happened either 
OK so pull off the ingition wiring plug under the steering column and use a jumper wire to get innition and start the car poke a bare jumper
wiring into the terminal hole
If this works then its the plastic plug below the ignition key there only about $40 new
Have tried that already, no joy. Is very frustrating!
what happens when you put a wire from the large battery lead on your starter motor to the solinoid wire ? Or just use a spanner / screw driver
Hi
If You tried the screwdriver onto the small terminal
and nothing happened
You solenoid is bad..
You can then try screwdriver across the two large nuts
IF that doesn't work...
it May be a bad battery..
or brushes in Your starter motor may be worn out..
or as someone suggested- if the bush in the bellhousing is badly worn, the starter motor may jam in the bush/ring gear.,.
I always tell people to grease the bush and end of starter motor...
LEE
Tried that, nothing happened, yet when the starter was out of the car it did work