I have just visited the fiat dealers about my central locking. They have said it will cost me £70 to recode my key and that every stilo they have done this to have not worked.and it will cost me around £190.00 for a new key plus £70 to code it would this be right
No that doesn't sound right at all. They don't recode the key- that's not possible to do- no wonder they have trouble

You program the car to accept the key transmission frequencies
As you can program the car to accept up to 4 different key fobs I can't see why they would have problems with just one. If your key fob isn't putting out any acceptable transmissions then it might well be the end of it but that would be the only time that it would need replacing.
Change the battery anyway and try it as a garbled frequency won't be accepted by the car
What you could do is look on Ebay for a working Stilo key fob (£10). Swop over your metal key and immobiliser chip into it, (5 min job) then take that to a Fiat garage so they can program your car to accept THAT key fob. You'd need to take your log book to prove ownership and code card (which Fiat can obtain for you if you haven't got one)