Mike,
Good question. Once you get more advanced, it is easier to edit the manifest xml directly.
The other option is to manually create the extension definition by editing the extension from the Host > Extensions page. I show you a little of this UI in the videos. But there is also an option in the editor to export the manifest which will create the file for you to put in your package.
Either way is valid, I just find it easier to not go through the UI to make changes to the manifest.