My dealer wants $1200 also - the kit is only about $700 from Katzkin - I'm not sure, but I think that there is a factory leather option now - part of the mid-year changes, like the sport auto, tweeters, side markers, and new rims. If your P5 was made before February 28, 2002, the leather is an aftermarket kit, most likely by Katzkin, and you paid well over cost.
The $1200 is ridiculous dealer markup. Installation is supposed to be easy (according to Katzkin, it's a definite DIY) so the cost for that is minimal - maybe $100?
Anyway - leather is nice. But the dealers are making tons of money on it for $1200. Especially with the new factory option being only about $500.