1) If you want to do it w/o transferring content from your existing drive (such as being able to use your download history to get things again) then yes.
2) If you can't do #1 or you want to save your games, etc, then yes. You do need the cable.
I've used the cable 2x. One from my 20GB to 120GB Elite, and one from my 120GB Elite to my 250GB Slim.
Both times it's gone through flawless. Took about 20mins total. Ran by itself. Easy stuff, and it keeps all your profiles and game data (w/ the exception of actual games stored on the HDD for faster access) and it's all good.