I need a replacement key and key FOB. I have checked with my local dealer, and they said that the key is $42 and the FOB is $105. In addition, they indicate that there is at least a 1 hour worth of labor charges ($60) to make them operational. All toll, over $200. Any suggestions? Does this sound correct?

If you really want to be cheap - or delay the total cost - hide your one good ignition key under the mat - order new keys from volvo using the VIN number - when these keys arrive they should work on the door but wont start the car since they have not yet been programmed for the ignition - now everyone has a key and use your one good ignition key under the mat - program them later when you have some additional cash to donate to your local volvo dealer.

You do not state what year your car is. Every Volvo that I have purchased from a dealer came with 4 real keys. I'm sure the salesman was not too happy, but I doubt that it cost THEM $200 each.
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2 8s & 2 7s 600,000 miles total

YES - I HAVE BEEN THRU THE SAME THING - YOU ARE OBLIGATED TO GO TO A VOLVO DEALER - THE KEY IF 99 > IS LAZER CUT EITHER AT THE DEALER IF HE HAS THE EQUIP OR ORDERED FROM VOLVO USING THE VIN NUMBER IF THE DEALER DOES NOT HAVE THE EQUIP TO CUT A KEY - IN ADDITION YOUR CAR'S COMPUTER THEN HAS TO BE PROGRAMMED TO RECOGNIZE THE NEW KEY - SO YOUR END UP PAYING A CHARGE FOR THE KEY - THE SOFTWARE TO CUT THE KEY - AND THE LABOR TO PROGRAM YOUR CAR TO ACCEPT THE NEW KEY (DONE IN THE SHOP) - IN THE ATLANTA ARE PRICES RANGE FOR TWO KEYS $150-200 - DON'T LOOOSE YOU NEW KEYS

Actually, I just called again for clarification, and it's worse than I thought. They want $50 more dollars for the software. I don't understand why a consumer has to pay for them to use the software needed to do their job, but, I guess Volvo has figured out every angle to rip off the consumer.

You might try a couple of other alternatives:

1) You can buy the key fob on Ebay for around $20-40. Take that to the dealer and have them program it.

2) Call a local swedish car / volvo specialist and see if they can do better on the price. Most have the computers that attach to the car.

Unfortunately you're probably stuck getting the laser-cut key from the dealer.