There are two things which generally cause 996 engine catastrophies. A cracked cylinder liner, or a failed intermediate shaft/bearing. A cracked liner can often show up before total failure with a water/oil intermix. An IMS failure tends to give you a large clatter a second or two before the hand grenade inside the engine goes off.
These problems are RARE, and get blown out of proportion by internet forums. I am not in denial that they exist, and there are no confirmed figures, but I believe the percentages are low. In the 5 years I have been a member of this forum, I am can only remember one IMS failure (poor Rob Kellock) and no cylinder liner failures. However, there have been dozens of posts from people worrying about the problems.
Go on to any American forum, such as RennTech or Rennlist, and you'll find quite a few failure reports. But remember that they sold tens of thousands more 996's in the US than the UK. How many reports will you see that say "my car is wonderful, and I've never had a problem"? Precious few. People tend to join forums and rant at failures than praise the lack of.
I just heard that my old C2, which I sold with 85,000 miles on the clock, has turned 105,000 and still going strong. The owner bought it as a second (4th actually) car, but loves it so much he drives it all the time.
If it worries you to the point of not enjoying full use of the car, I would suggest a decent warranty, or get rid of it!!
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