Your case is the correct one. Please take a look at the user manual for assembly instructions:
http://rayshobby.net/docs/ospi14_manual.pdf
Because of the limited space, you can’t directly use a full-size SD card. micro to SD adapter is included in the kit. Any micro SD card of 4GB or above should work fine. If you already have a full-size SD card, you can flash the image, make sure it works, and then cut it in half:
http://www.raspberrypi.org/forums/viewtopic.php?f=40&t=31609
There are also other low-profile SD card adapters available for RPi.