You need to return both keys, and although there is no duty to show them a cut cable or to give proof that you really locked your machine, the police report probably has to check out (i.e., you are only covered if your computer was locked up securely per direction.)
Anyway, yes, it's peace of mind, with a bunch of qualifications.
The cable itself is nice, looks sturdy, and is flexible enough not to be a pain. I'm not sure if I'd leave my computer locked up in a hotel room with it, but for semi-secure locations like a shared common work area, it's ideal.
