2.54mm = .1"

The connector attaches to a normal 10-wire ribbon cable; the wires will end up alternating between the two rows of pins.

that would be really hard to do

Pin 1 is indicated by the triangle on the side of the connector. The pins then alternate like this:

> 1 2
  3 4
  5 6
  7 8
  9 10

The numbering will also be the position of that pin in the ribbon cable:

1
2
3
4
5
6
7
8
9
10

If you have two connectors on one ribbon cable, ensure that they're punched down in the same orientation, to ensure that there's continuity between matching pin numbers:

1 2 -ribbon- 1 2
3 4 -ribbon- 3 4
5 6 -ribbon- 5 6
7 8 -ribbon- 7 8
9 10-ribbon- 9 10

This particular connector will fit into the following header: http://www.sparkfun.com/products/8506

That is exactly the product that you have an image of. So, to answer your question, this will connect perfectly.

I gotta echo the above sentiments. I've just broken two of these connectors.

Any chance you folks could offer these, pre-made? With the "breadboard-friendly-end"?

The trick is squeezing it together without touching the pins. They make special ($$$) tools for this, but I'll usually use a bench vise with an extra piece of wood or plastic that fits between the two rows of pins on one side. Bad ASCII art:
] pin+--+[
vise jaw ]bit of wood| |[ vise jaw
] pin+--+[
You could also put it in a breadboard so the pins are protected, and squeeze it through the breadboard. I've seen people use pliers, but I always worry about breaking them if they're not squeezed together straight. How do you other customers assemble these?

I've had good luck with a pair of lock-jaw pliers. Just set the pliers for slightly larger than it will be when crimped, line everything up, and squeeze.

found a way to do it - use a vise. You have to carefully line up the pins with the corresponding wires. The first time I tried I shorted out some of the pins. It seems to take a lot of pressure to pressed through the cable. I wasn't using sparkfun cable, so I don't known if that is the problem.
I saw a youtube video that showed the process, but he barely used any pressure. His connector was a three piece kind.

It will be 2 rows of 5 connectors. When you place the 10 conductor ribbon cable in to crimp it, you'll notice that every other insulation piercing pin is slightly offset. This is to connect to one of the two rows of pin sockets.