How much HP can stock engine handle

Hello, I have a quick question. My friend just bought a 2003 1.8T and I was woundering how much horsepower at the CRANK can a stock 1.8T engine handle? Also people with VW have said that chiping the car will give also some power? What kind of chip would that be, and where can we buy it ?
We will be begining to mod it next month and I wanted to know how much HP the engine can handle since we dont want to blow it :).


Thanks