That profile allows the service to gather the UDID of the testers device. This way the user never has to manually search that UDID and it is possible for the service to provide developers who invite users that information automatically.
Additionally, the installed web clip will authenticate the device against the service, so the apps that can be installed will be offered. These apps are found by comparing the UDID of the device against the provisioning profiles of all apps available.
So yes, you still need to add the UDID to the provisioning profile and compile your app against it.
The profile process is provided by Apple and well documented here: http://developer.apple.com/library/ios/#documentation/NetworkingInternet/Conceptual/iPhoneOTAConfiguration/Introduction/Introduction.html#//apple_ref/doc/uid/TP40009505
There are also other services who leverage that functionality for "easier" gathering of UDIDs and providing an easy way to let users download their beta apps.