Yea this is correct, it is the blue plug that goes into the factory light bulb harness. Had to do the same with mine in order for the HID's to work correctly. It might take you a few times to get it right (sometimes just the Highs work).
I have a "china brand" HID Bi-xenon kit that I bought from a local dealer. I had the same problems that you had, but i read on the forum that there are three wires on the connector on the HID kit that plugs into the stock harness that need to be switched around. All you need to do is to poke them out using a small screwdriver like the 1 for eyeglasses. I had to try about 3 times to get the right combo but i eventually got the high beams to work.
Edit: I have the "9007 Xentec 6000k Bi-Xenon HID kit"