After some study I am answering my own question.
Key Adaptation for 2001 VW (Built 29 Nov. 2000 so had Immobilizer II)
It is necessary to know the 4-digit PIN code also referred to as the Secret Key Code (SKC), key code, or immobilizer code. The locksmith that cut my new key also used some of his equipment to determine my PIN code. Since this car has the Immobilizer II version then supposedly a new transponder is not necessary although the one I used was new. The transition year for Immobilizer II began Oct. 2000 and this car was built one month later.
• Press Connect and then Scan to prepare OBDeleven PRO
• Click on Module 17 - Dashboard
• Click on Security Access
• Record previous login code number (0XXXX) and Enter new Pin Code (0YYYY)
• Add a zero to the 4-digit such as the following: 0YYYY
• I added the wrong code at first and software rejected it
• Press OK
• Click on Adaptations
• Enter Channel 21
• Read value of number of keys programmed (my value was 1)
• Change new value to the number of keys to be programmed (I changed the value to 2 as the number of keys to be programmed which included the existing key)
• Press OK
• Close Adaptation
• Switch ignition off
• Remove key
• Insert next key and switch ignition on
• Remove key about 2 second after immobilizer light goes off
• Both Keys were adapted
