Well, now I'm fairly concerned. I just had the car at a Pontiac dealer and they didn't say anything about this. Any idea of how much it would cost to replace with labor?

You should try to do it yourself because of the extreme simplicity that'* involved. If you can change a light bulb, you can change a sender.

Step 1. Unplug harness connecter to sender.
Step 2. Unscrew sender.
Step 3. Apply thread sealant to new sender.
Step 4. Screw in new sender.
Step 5. Reconnect harness connector.

You're done.

The oil pressure sender is quite easy to replace. However, to answer your question, this is what I show listed...
.
. Oil Pressure Sending Unit 12574309. $52.64
Notes. Contact dealer for most current part and price information.

Labor . Skill Level. B Mfg. Warr.. 0.3 Std. 0.5

If those figures are accurate, roughly $90 to have it replaced.

Well, I think I'll give it a try myself, if its as easy as all that then I guess there isn't much I can screw up. I just can't believe it never clicked in my mind that the needle going to 120 PSI and staying that way all the time was a problem. Thanks for the info everyone!

To this we should add.. that the sender is back by the oil filter. Easiest way to reach it is pull the passenger side tire and the plastic splash shields. It'* very easy though.

Copied/pasted from a prior post (maybe a few more DIY info).

Regarding oil pressure sending unit:
Labor quote from dealer: Around $90.
Part cost from Autozone: Around $35.
Realize it could be a bad electrical connection (high voltage causes high oil pressure reading according to maintenance manual). Fortunately for me, the sensor was indeed bad. It'* located under the power steering pump and is directly above the oil filter.

DIY hints for replacing the sensor: Get an oil pan to catch oil when the sensor is removed and have the new oil pressure sending unit handy to minimize oil loss. Removing the electrical connector from the sensor is much easier after removing the front passenger tire. I believe the sensor requires either a 1-1/16" deepwell or an adjustable wrench with long reach. There'* not much room to work. Assure the new oil pressure sendingn unit is tightened properly (don't want loss of engine oil) and retorque wheel.