Yes it is really needed. This is the most misunderstood part of installing a
TH-700R4 (and 2004R for that matter) and getting it correct is critical to the very survival of these transmissions. This TV cable system controls the internal hydraulic pumps production of hydraulic pressure and volume, if that isn't enough, it also has a major influence on shift timing, quality and "feel". That’s the bad news, the good news is we have all the necessary pieces to make this easy to get installed and working correctly. These parts are very inexpensive, however you should plan to spend a few hours getting this dialed in. In these two pictures we see a Holley carburetor at idle(1) in the first picture and at wide open throttle(2) in the second picture.

These two pictures below show the plunger on the valve body inside the transmissions pan. This valve is moved in and out by the TV cable connected to the throttle linkage on the carburetor. The first picture shows the plunger all the way out (homed)(3), this should correspond to the first picture above(1): the carburetor at idle. The second picture below shows the plunger all the way buried(4) and this should correspond to the picture above showing the carburetor at wide open throttle(2).