This very standard procedure can be a real bear if the person doing it is not armed with the following details:

Symptom:
You install a 12volt engine in a swing-axle style tranny and the engine won't budge. The starter just clicks. The crank pulley is frozen in place.

Indentification:
First of all, a person must identify what they have. What makes a tranny "6 volt"? What makes an engine designated a "12 volt"? 12 volt engines normally have a larger flywheel and, in turn, a larger clutch. The difference for the flywheels is some silly amount like 3 millimeters or just under a quarter inch... anyway... it is a small amount. The clutch, on the other hand, is very noticable with the difference being 180mm and 200mm disks. The 6 volt clutch looks like it was made with bailing wire where the 12 pressure plate is more of a standard heavy duty spring-looking-thing.

Transition Confusion:
'67 was the first year for type 2's to use a 12 volt charging system. Of course, with all Vw applications, be wary of transition years. In other words, a '67 type 2 (and optionally in '66) used a 12 volt generator and starter, but used a 6v starter drive (bendix) and a 6v flywheel starter ring gear(109 teeth), but had the later, larger, 12v flywheel (usually 130 tooth). I belive the type 1 also falls under these same changes at the same dates but I am not sure.

Forgotten Bushing:
Dont forget the often overlooked starter drive "bushing" that fits into the tranny and stabilizes the open end style of starters used by Vw. The outside diameter of this bushing is the same for 12v and 6v, but the inside diameter for the 12v is much larger. DO NOT be tricked into keeping the 6v bushing with the 12v starter. Yes it looks tight, NO it won't work. What happens if you try to use it? The starter drive binds and zaps your battery like a lightening bolt after a start or two.

To Shave or Not?
So, you have identified your tranny as a 6volt tranny and the flywheel on your engine as the larger 12volt sized. Otherwise you would not be reading this article, right? Now what? We need to grind out a small amount of magnesium out of the transmission to clear the extra 3mm of diameter on the larger flywheel. Concentrate your grinding on the areas where the bolts go through your transaxle to the engine, but you will need to shave all along the top and bottom of the tranny and slighly on the sides. If you just go ahead and bolt the engine down tight, the flywheel will scribe your grinding points.

Danger!
Before grinding, take the necessary precautions to avoid any accidents caused by sparks. You say magnesium doesnt throw sparks when you grind it? You are right, but there are bolts in the bottom of the tranny that hold it to the frame brace. If you bump one of these bolts with your grinder, they can spark and ignite your magnesium dust if it comes into anything combustible... like your sleeve. Or, if you put a rag over your throwout bearing (I recommend simply removing it) to keep metal shavings from getting in it, this can ignite. And...whatever you do, DO NOT use anything like water to put out or prevent a magnesium fire. Water IS a catalyst for a magnesium fire and the results could be disasterous.

Throwout:
There is a difference in a 180mm clutch and a 200mm clutch's throwout bearing. I am not sure of the specifics, but for the work involved and the price of throwout bearings, it is a good idea to replace the throwout bearing on your tranny clutch fork previous to installing your engine. Remember, if you decide to use a used throwout bearing, do not spray it with WD-40 or any kind of solvent as they come prepacked with grease and you will simply break this grease down.

Good luck!
Well, you should be able to handle it from here. Take your time and double check everything.

Failure:
If you put your engine in and hit the power and your starter just clicks, it means you have to pull the engine back out and grind some more. Some people recommended simply loosening your four main bolts and trying to start the engine and tighten the bolts at the same time. I DO NOT recommend this method. It is simply TOO dangerous. An engine is not a fair trade for arms or fingers in my book.