I'm having a misfire and I can't figure out whats causing it.
I noticed that this thing is sucking a lot of air in and is super loud?
could this be causing the misfire or is thas just a side effect of the misfire?

I believe that is your vacuum pump, I could be wrong. Someone please double check...

Audi parts department told me today that that's a breather valve.
Any ideas on how to test to see if its bad?
its like $145 and I don't want to replace it without being sure that its faulty.

i dont know bc i drive a 1.8, but dont buy parts from the dealer! go through ecstuning or aboveallmotorwerks

I bet you have two issues here, not one.

I'm skeptical that this part is causing a misfire. If its part of the vacuum system you probably have a vacuum leak and you need to start digging and replace the leaky hose(s). I'm in the middle of replacing the vacuum lines in my wifes 02 3.0 right now and every time I get a length all done the sucking noise moves on me..so I'm just going to replace it all. The OEM hoses are brittle and seem to be prone to cracking easily.

Looking online at some parts places, that thing looks alot like the end of the secondary air pump...but I'm not positive thats what it is.. Thats a system that I'm fighting with myself right now and its right near where I have a definite vacuum leak.

My wife's car had a misfire and I changed out the plugs with a noticeable improvement...the old plugs were the original equipment and I was unaware that they were not the extended lifetime plugs that seem common in most cars these days...they should be changed every 40 or 50 thousand miles I think the manual says.My old plugs were pretty nasty looking and the gaps in most of them were close to double the proper gap

The misfire may or may not be more of a conventional fix...spark plugs, coil packs, etc. I'm no expert by any means so if someone who knows better chimes in, by all means disregard my advice.

It's part of your crankcase breather system, and if it is makes a lot of noise, then your vehicle has a vacuum leak, in which causes lean misfires........ the part number should be something like 06C103245 and you may need the breather hose also, part number 06C103217H. The crankcase hose are plastic and get brittle on high mileage vehicles.

so I took the breather valve off and opened it up to see what the problem was.
The rubber gasket inside is torn and is letting in air. I couldn't buy a new one today because the dealer is closed on weekends so I decided to just plug the holes in the valve to see if it stops the misfiring. The engine ran better but its still misfiring.
So I'm guessing that this wasn't my only problem.

Here are some pics:

The vacuum lines in your first pic are all frayed and broken, you are probably running lean as hell. Fix all your vacuum leaks.

Any follow up on this? I am having the very same problem. Thanks.

Well, I replaced the breather valve and all 6 coils to fix the misfire.