What's the Difference?
Both fan shrouds styles will look very similar when viewed in the engine bay. The main difference is how these fan shrouds direct air through their oil coolers. Take a gander behind your fan shroud. Is there a DOGHOUSE attached to the back?

With a Upright Fan Shroud, the Oil Cooler sits INSIDE the fan shroud. This style fan shroud was originally found on VW cars through 1970.

With a Doghouse Fan Shroud, the Oil Cooler sits BEHIND the fan shroud. Cars manufactured after 1971 originally had a redesigned "doghouse-style" fan shroud and oil cooler.
Upright Fan Shroud

This is the original bad boy of air cooled engineering. The Oil Cooler is located INSIDE the fan shroud. The cooling fan would spin inside the fan shroud, blow air through the oil cooler, and out over the cylinder shrouds. Unfortunately, this also causes hot air that had passed through the oil-cooler to be blown over the #3 cylinder. While this design worked fine for 36hp engines, it's also notorious for causing the #3 cylinder to overheat in larger engines.

 Upright Fan Shrouds

Doghouse Fan Shroud

Once VW upgraded the VW Type-1 engine to 1600cc it needed a more effective cooling solution. So came the introduction of "Doghouse" fan shroud, named after the open back side which resembled a dog house. This redesign took the Oil Cooler out from inside, and relocated it the BEHIND the fan shroud. Additional engine tin redirected the hot oil-cooler air outside the engine compartment instead of reblowing it over the piston cylinders.

 Doghouse Fan Shrouds

Conclusion:

VW purist might insist on keeping the stock upright fan shroud design for originality & simplicity. After all, it was the original design on Type-1's from 1954-1970. However, switching fan shrouds and oil coolers over to doghouse style models is a fairly common and simple procedure.

If you have modified your stock engine then we definitely recommend making the switch to help with heat dissipation.

Honestly, either design is fine as long as your car is not prone to overheating. Just know what style of fan shroud and oil-cooler you are working with before placing an order since it's pretty common for previous owners to swap these out.
Casey's Tech Tips: Doghouse vs Upright Fan Shrouds