Trying new things is all part of the fun! Doing this step isn't required at all, as others have pointed out. But part of the fun in life is experiencing new things. I would have never used gelatin with my extract brews, but I have found it useful in my all-grain brews, and especially with yeasts that don't like to floc. like some of the Kolsch yeasts.
What you bought is the correct stuff. Any unflavored gelatin is fine.
I can only say how to do it for a 5 gallon batch. If you are doing a 2 gallon LBK batch, you'll have to adjust the amounts. These are my notes on how to use it, gleaned from several sources:
HOW TO CLEAR YOUR BEER WITH GELATIN
Cool the beer as cold as you can (crash cooling), you can do this in a fermenter or keg. The colder it is, the clearer the final beer will be. I've had good results at 18-20C, but for crystal-clear beer you need to be at 5C or cooler. Don't freeze it...
In a lidded pot, add 1 packet (1 tablespoon) unflavoured gelatin to 250-350 ml (1 to 1.5 cup) boiled and cooled water (20C/room temp or colder). Let sit 20 minutes to 'bloom'. You'll notice that the gelatin will swell, from small prills to balls 0.5-1 mm in diameter.
Heat gently, in a pot covered with a lid, to 150F. Remove from heat, keeping covered, and let cool to room temperature.
Add to top of cold beer.
In 2-3 days, beer should be super-clear. You can bottle at this point. If in a keg, you can begin carbing as soon as the gelatin is added.