I think you're fine so long as that cable can read the 20GB drive even when not connected to the console. I'm betting most of that info is from before the 60GB model came along.

I can't really imagine why it wouldn't work so long as the amount of data you're trying to copy is equal to or less than the total amount of free storage space on the other drive. And if you have a 20GB drive you're looking to copy to a 60GB drive, that should satisfy the requirement.