Yes, you connect the "N/O" and "common" terminals (the two on the far right) on the I/O Linc to the two terminals on the garage door opener that the wall button connects to. It is in parallel with the wall button.
Then, you connect the "sense" and "ground" terminals to the magnetic sensor switch. I put my switch in the side of the door at the top. That was easiest in my garage.
The other thing to pay attention to is the switches "mode." That is described in the full manual (http://www.insteon.com/pdf/2450.pdf). It says that the default is "Latching" mode. Latching mode can potentially mess up the operation of your wall buttn, so you want to get that right. Might be worth verivying with a multimeter before you wire it up.
I think mine was defaulted to "Momentary B." "Momentary C" is their recommendation for garage doors, but I prefer Momentary B. The manual explains the process to change modes.