This circuit allows the RCX to receive feedback from the decoder in the locomotive. You don't need it in order to program the CVs in the decoder. However, the circuit is nice to have because it makes it possible to read the current CV values out of the decoder. The advanced circuit will also allow you to add an additional RCX running in "accessory mode" to your setup for controlling automated switches.
You can make a simpler version of this circuit by only building half of it. If you hook this version to the RCX and it doesn't work, just rotate the input connector 180 degrees and it will then work (rotating the output end will have no effect).
The resistor is your standard 1/4 watt variety.