Does anybody know the purpose of this pipe???
Sounds like the exhaust-pipe from the engine coolant heater, which is fitted to the dci's to heat up the coolant, as you would otherwise have to wait a long time for any creature comfort with these efficient diesels.
It does smell a lot of burnt diesel - but should only be active while the engine itself is warming up. Have you tried your reversing maneuver with a hot engine ?
If that really is the source of the smoke, then you shouldn't worry.
If its not, then keep looking. I have never noticed the supplementary heater exhaust from inside my 2.2dci.
It may also be that your suppl-heater exhaust-pipe is leaking further up, allowing for the gasses to rise through the engine compartment, and possibly to your aircon air intake ?
Poor performance however sounds like an EGR valve that need cleaning, - search this forum for EGR and you will find many hints on this.
The simplest is this:
http://www.matrasport.dk/forum/index.php/topic,162.0.html/Lennart