The step that you noted is mentioned in the thread, it just says to update the product insert and update pages to include your new sub category select list. You would implement this just as you have said by creating the recordset, then the select list. You will also need to update the insert or update server behavior to record this new information.
You will not do any editing on this page to get the product to show in the menus correctly. That will occur when you modify the menus on the front end to include the sub categories.
