Q: I was told that 1 usb cable provides it with power, and the other one is for data xfer. I never questioned it cuz I didn't want to risk screwing up the HD, but I just found out it works just fine with only the data cable connected. So what is the other one really for?
A: It's to provide extra power. USB can only provide 2.5 W of power but each USB port on your computer (or powered USB hub) can provide 2.5 W so plugging it into 2 ports means the device can draw 5 W if it needs or wants it. One cable is used for both power and data transfer and the other one just provides some extra power, laptop hard disks (which is what your external hard drive will have in it) can run just fine off USB power although with only one cable they'll probably take a bit longer to spin up at first (but otherwise they'll work work fine, once the drive is spinning it doesn't need that much power).