I have looked up this question myself as Im planning to some lowering.
The advice Ive read says that you can lower 60mm with 17" wheels without any problems.
If you are only replacing the springs (not the shocks) then you should stick to lowering around 35mm.
Generally, the shorter the spring, the higher the spring rate. So shorter springs would need a shock with more damping to sort it all out, so lowering 60mm+ on standard shocks would screw up the cars handling and cause the standard shocks to wear out quickly.
PS: Your car (same as mine) is really a Mk2 Phase 2, (Mk3 will be out in 2005).