My light came on a couple of weeks ago. My car went in to the stealers and they ordered a new Lambda sensor and now that the part's arrived, my car's booked in tomorrow for replacement. It's being done under warranty. I'll drop it off before work and pick it up afterwords, so no idea how long to fit - sorry.
I have the TFSI FR, but it's the same principle. From what I've been reading online: I understand the Lambda sensor is used by the ECU to measure the amount of oxygen in the exhaust gases thus judge how much fuel to put in the mix under various conditions to ensure an efficient burn. The car can work without it but using only stored maps of how much fuel is needed at certain revs etc - having the sensor means the mix is 'fine tuned' so cuts down on emmisions and presumably also might improve consumption figures.