I received my Xtool VAG401 scanner recently around $ 100 with DHL shipment to my place. Tried it out straightly on my 2005 Passat and found it quite easy to use. If you have used VCDS VAG COM cable, you can probably figure out how to use this without reading the manual!
They include a microSD card reader used for the updates. They also include a USB cable. The only use I have seen for the cable is to power up the unit from a USB port instead of your car. It came with a 160 * 160 LCD screen, and therefore no need to use a laptop or computer when diagnosing.
The OBDII cable that hooks between the VAG401 scan tool and the car is a straight thru cable. There are no components in the back shell of the OBDII connector. The other end has a 15 pin male d-sub connector.
I was able to use mine to read out the key code from the dash. I verified that it was the same as one I hadd gotten previously from VAG- Tacho. This is on my Passat TDI.
It reads error codes just like VCDS, although there is no autoscan function to scan all modules that I can find. It has successfully found all installed features on both my Passat and my friends Allroad. Both of my cars are dual k not CANbus. I have not tried it on CANbus car yet.
The best way I can describe the interface to the modules is the older VCDS lite interface. The original modulemenus were almost a copy of VCDS, although the latest update simplified them somewhat.
It supposedly can match keys to the dash / immobilizer, although I have not tried it. It has a few other functions that VCDS does not have, such as mileage changes, etc. It can code modules, do adaptations, etc.
Looking at Xtools website, they had 3 or 4 software updates for the VAG401 last year, the latest in Nov 2014. The descriptions of the updates are hard to find, and the release notes are cryptic and in Chinglish. However, they seem to be actively updating it.
I figured out to update mine. Download the update application from the xtools website, and use the VAG401 serial number as the user name, and the password from the about screen as the password. You do not need to register.
I downloaded the updates, and it said the update was successful. When I started the diagnosis, it loaded a new .bin file. Menus changed somewhat, and new options were added.
I got it in a couple of days. If you travel a lot, you can keep it in the car. You do not need a computer or power supply to use it, which is great. It has a lot of capability for the money , and is very convenient. However, user support is nonexistent, so being previously familiar with VCDS is a definite plus. I can not speak for how well it works on current model cars.