Keith...the computer doesn't just do 10000 miles or 365 days...it actually monitors oil quality using sensors and your driving patterns. That's how it calculates the time till next service. It will keep adjusting this way until your service is due. Its a precise method of calculating your true service requirement. I believe in the VCDS you can make it just count days and miles instead of using quality sensors and driving patterns. I'd much rather use the default calculation.
I'm not sure why this display is not working on the OP and others...make sure a scan for codes is done, although you would think if it was a bad sensor or some other problem that it would set a check engine light etc.
I know you guys have been saying you have reset the service reminder from the MFD, but have we reset it using the VCDS scan tool, it looked like even when the dealer tries it they reset from the MFD. Try resetting with VCDS tool and see if that has more success.