I just dont understand what's so special about Xenon lights that warrants the price? How do they cost that much more to manufacture, can anyone explain technically how much more complicated/expensive they are to make? I have a Xenon torch and it didnt cost much at all.
Your xenon torch is just a normal incandescent bulb like those that have been available for more than 100 years. The 'xenon' moniker comes from the fact that the filament is surrounded by xenon gas rather than the more usual halogen, krypton or argon/nitrogen mix. You can also buy xenon-filled conventional headlamp bulbs, which allow the filament to burn hotter and thus brighter. The 'xenon' headlamps optional on the Golf and others are correctly termed 'gas discharge' or 'high intensity discharge' (HID) lamps and are a quite different technology. Rather than a glowing filament, these HID lamps use a high voltage to create an electrical 'arc'. The result is a brighter, whiter light which consumes less power and gives better vision.
A standard Golf headlamp consists of little more than a couple of single or twin filament bulbs and a silvered plastic reflector.
An HID is far more complex. As mentioned earlier in this thread they require an electronic 'ballast' to provide and regulate the high voltages required to create and maintain the arc light source. Together with a more complicated bulb design, this electronic module is an additional source of cost. The light from an HID is so much brighter than a conventional headlamp it requires a projector lens system rather than a simple reflector. In an HID lamp the dipped and main beam both come from the same source so the optics of the projector heed to be adjustable. HID headlamps are also required by legislation to have automatic self levelling which requires sensors, stepper motors and control electronics. Headlamp washers are also required and on the Golf these not only use a larger fluid reservoir but are retractable. Plus the new Golf HID's introduce the cornering function, which I am sure adds further complexity to the system as the lamp can move both up and down and from left to right. All this adds significant extra cost.
Finally, the marketing and sales departments both deem all the added benefits and 'premium perception' of optional HID technology worthy of a larger margin, hence the prices we are asked to pay.