If all you want to do is a firmware upgrade, then there is no need to change any hardware. It sounds like the person who answered your questions doesn't know what they are talking about. If you want to do the upgrade yourself, then you will need the InFocus cable.
I upgraded my firmware almost immediately after I got the projector, so my recollection is a little vague about the improvements. From what I remember, the video noise was reduced and black level improved. There seems to be almost universal agreement on these forums that the upgrade to 3.2 is a big improvement.