Product Reviewed: Under Drive Pulley by Unorthodox Racing.
Product description: Ultra light replacement crank pulley, with a very mild under drive. Constructed of CNC’ed aluminum.
Product Cost: $229.00

Installation: 2.5 hours by CarNutz of Bellevue, WA.
Installation Cost: $162.50

Other parts: two new belts (purchased from CarNutz)
Parts Cost: $16.12 + $29.06 = $45.18

Pro: (1) Improved MPG, (2) Improved HP/Torque, (3) Improved peripheral life

Con: (1) If belt breaks, it’s a 2-day wait for parts & (2) AC may take a few seconds longer to reach MAX cooling.

Detail:
     This is a good mod to do for low cost. Adds 18hp, improves MPG (2.5mpg for me). Increases the speed and smoothness of the REV's (builds RPM's faster). Basically cost is about 1/2 of a chip, but so is the benefit. But a bigger boost to MPG then the chip. There are no negatives to this modification. Voltage needs to be 12.3 to 12.5 to charge a system. Before (at idle) it was 14.x as the Voltage Regulator (VRE) kicks in to hold it to 14 to avoid damaging your peripherals. Afterwards it's still at 14.0 at idle (still hitting the VRE after the under drive pulley). Also the weight of the piece drops from 5lb to less then 2/3 of an lb, so the impact is the same as a lightened fly wheel (in addition to the benefits of the under drive main crank pulley)

I have one installed. It's nice. It's not a good idea to install both a lightened flywheel and a pulley since you may get premature main bearing wear unless you blueprint and balance your engine.
Unorthodox Racing's pulley is an extremely light replacement for the main crank pulley. It also is a mild under drive as well. I did a before and after voltage test. Before 14.0 (hits the voltage regulator and gets stepped back down to 14.0). After it still hits the VRE at idle. Meaning at idle it's still putting out more juice then your car can use. To charge your battery you need around 12.3 to 12.5 at a minimum. Ideally around 13.0 or higher. To avoid damaging your peripherals a VRE steps down the voltage output from your alternator to 14.0 when it exceeds 14.0. In the 1.8t engine (A4 or Passat) this is always the case (or was on my car). Claimed gains are 11-18hp. I'd say this feels about right. The speed shop I used (CarNutz in Bellevue, Washington) claimed it was at the very high end (18hp). I was told I might also get 1 or 2 mpg better. I get around 2.5mpg better. (mixed city/highway with moderately aggressive driving). The engine revs smoother and faster. It feels like an invisible rather heavy passenger got out. Also the extra driving range is nice. If you have lots and lots of high draw aftermarket stuff. Like say... over a 300-watt stereo with subs, etc this mod is not for you. If you have a decent stereo and normal peripherals (cell phone, upgraded stereo, changer, radar detector, etc) then it's a great option.
Calling this part an under drive pulley is a misnomer. Since what you're really doing is overdriving your peripherals less. It will add life to those peripherals. Also the slight reduction in power assist in the steering is just right. It now has a slight less Buick feel to it. I did this to my M3 as well. I got bigger gains in HP and MPG on the M3. As always YMMV.

Contact Info: 
http://www.unorthodoxracing.com/index.html
http://www.theracenet.com/docs/carnutz.htm