I've just gone from a K03 (Standard) to K04 in a 2007.
To get the best out of the K04 you do need all the rest of the parts suggested by Revo (HPFP, Injectors, Intercooler, CAI and T/B Exhaust). However, having spent out on all of this kit, and a set of Bilstein B16's, I fitted it myself before Revo (TC Garage, Copthorne, Excellent guys) installed the Stage 3 map.
I have to say, with the K04, turbo and injectors (before the Intercooler), there was a definite increase in performance AND (surprisingly) fuel ecconomy. The existing map (stage 1) handled the new parts easily save for a few engine management lights to do with the Lambda sensor and the New Exhaust.
I'm not sure if New internals are essential (even for Stage 3), but a wise investment.
The K04 is an easy fit if you have nible fingers - getting the old turbo out and the new one in is a bit tight, but can be done. Just make sure ALL the oil and coolant connections are tight - you don't want to be trying to stop a leak once the new turbo is fitted - next to impossible (I learnt from my own mistakes...).
You will have to relocate the DV valve. If you go for the Revo CAI you have a T-piece on the instate silicone hose (to turbo inlet) that allows you to relocate the DV to the front of the engine. Again, a new pressure pite is required from Turbo to throttle Body (to mount the DV). I went with the wider bore Nuspeed pipe.
The electrical cable to the DV can be taken out of the plastic covered loom and diverted from the end of the injector wiring loom to the front of the Engine bay without any need for cutting cables or custom looms. Just get some more plastic cover for a tidy job.
Now running Stage 3 with DSG Stage 2 and not looked back since (I can't look back, car is so ****** swift that I have to keep my eyes front all the time....!!!
G