Volkswagen Radio Replacement Interface Needed? & Other Radio Question

I was browsing Crutchfield for a new head unit for my 2011 Golf 2.5 base model, and came across the following "Installation Details"

Your vehicle is factory-equipped with an upgraded sound system. We strongly recommend that you purchase an adapter that maintains your factory door chimes (required for audible safety warnings), provides a switched 12-volt power source for your new radio, and allows you to continue using the OnStar feature. You should not replace your factory radio without this adapter. PAC C2R-VW2 $129.99

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I was wondering if this was necessary? My car doesn't have an upgraded sound system, or OnStar. For $129.99 I could buy a new (crappy, low-end) head unit. That seems like an awful lot of money to spend on an extra wiring harness. What does it do, and is it really needed? Or only on the models with the "fancy" radios?
My other option is to get an OEM touch-screen radio. If I were to do that, would I need to get the MDI interface box, or just the cable to connect to the radio? That darn box and cable would cost me ~$400 to add to my stock bottom of the barrel radio.

Yes, you need this. our cars use can bus. Basically there is no hot or switched wire from the factory. The factory radio reads an on signal from the canbus to determine to turn itself on. The adapter takes this signal and breaks out the remote lead, hot and ground as well as the switched output.

If you go factory touch screen you would just need the radio unless you go nav then you would need to code it with vagcom.

Thanks for the info. Looks like I'll be better off going with a factory radio (non nav) by the time I spent $400+ on a decent radio and the $129 for the cable. What's the model number for the non-nav touch screen HU?
And do you know if I bought the VW iPod cable, would I also need to get the MDI box, or does the cable plug right into the back of the HU?

I think you would need the entire MDI interface for $130 or so. I think the non nav head is the RCD-510

Bringing this back from the dead.
http://www.sonicelectronix.com/item_41234_PAC-C2R-VW2.html
$79.99 w/ FREE shipping

Yep, you need this. GMCs, Pontiac's, Dodge, and some other makes and models are also in the same boat with you too, so don't feel too bad.