There's nothing to be afraid of. The grey plastic part labeled 'optical' on your speakers is actually just a cover. Seriously. Just hold it firmly, then pull it out of the socket. Once you remove that, you will see the exact optical input as on the Xbox 360's output. Connecting an optical cable is as simple as plugging in one end of the cable to the 360, and the other end to the optical input on your speakers. That's it.

As for cable brand, I really can't say that an expensive brand will make any difference. I'm also using a RM25 cable for my 360. So far, it's turning out great. Digital signaling is not like analogue signals, where there can be interference. Lastly, yes, a RM25 cable is still able to carry a Dolby Digital or DTS stream from your 360.