AFAICT this does not use a /etc/X11/xorg.conf file, but a device specific
configuration file in /etc/X11/xorg.conf.d. Since Xorg in Squeeze configures
itself automagically it is (IMHO) preferred to manually configure just the
devices that you actually want to configure.
It might help if I break this command down for you:
1. aptitude -r install linux-headers-2.6-`uname -r|sed 's,[^-]*-[^-]*-,,'`
   This installs the kernel headers which are needed to compile the nvidia
   module. The `uname -r|sed 's,[^-]*-[^-]*-,,'` command will just expand to
   your architecture:
       $ uname -r|sed 's,[^-]*-[^-]*-,,'
       amd64
   nvidia-kernel-dkms
   and this package contains/pulls-in the nvidia driver itself.
This is where the wiki gets confusing. It says I need to Install the NVIDIA X driver and user-space libraries - step 3.
I believe I read somewhere that the nvidia-kernel-dkms also installs the driver and user space libraries. 
Is this step deprecated? 
 
 2. mkdir /etc/X11/xorg.conf.d ; echo -e 'Section "Device"\n\t
    Identifier "My GPU"\n\tDriver "nvidia"\nEndSection' >
    /etc/X11/xorg.conf.d/20-nvidia.conf"
    This command will create a /etc/X11/xorg.conf.d/20-nvidia.conf file with
    the following content:
        Section "Device"
            Identifier "My GPU"
            Driver "nvidia"
        EndSection
    which configures Xorg to use the nvidia driver in lieu of the nouveau one.