Yes, you have the right idea. The special cable is just like the cable you would normally plug into your Genesis for the audio and video. The only difference is the TV side of the cable is different. You will plug that into the converter - and then plug your component or HDMI cables from the converter to the TV (Since most US TV's don't have a RGB/SCART connection).
Beware though, some LCD TVs are incompatible with low res component video as I found out. My non HD TV works great with it though.
I know it's somewhat confusing, you'll just have to keep reading into it and watching videos and things about it. The more you are informed, the more you will understand.
Watch these videos, he explains it fairly well..
Part 1:
http://www.youtube.com/watch?v=cOhntr-4xx0
Part 2:
http://www.youtube.com/watch?v=ZakQh...eature=related