I had a spare VW key done at my local independent specialist, overall the whole thing costed me about £50-ish rather than £250 the VW dealers wanted!
If you have the earlier MK5's (<2007) most likely it would have the immo4 system which apparantly is easier to code than the later ones. I bought a blank key off eBay with the immobiliser chip and electrics for about £10, had the key cut at my local locksmith for £10 and took it to my local indy to code which costed £30 and in the end it works great.