You need it if:
1. Your built joystick has an LED.
2. You want to use a new style AES stick or NGCD pad.
3. You want to use a PS2 controller with one of the PS2 to Neo adapters (probably).
So, in short, you only need it if your sticks need it. Most custom sticks and all (AFAIK) old-style AES sticks don't.