This Ferrite ring is used to eliminate RF interference getting to your PC.It should be connected As SurfMonkey _#:@}™ says.Most monitor & PC tower cables are fitted with RF Chokes, look for the "chunky bit" near the end of the mains lead.
It usually goes in the power lead, a few turns of the power lead is wound on the ring, although the computer will work OK with out it, its likely to interfere with other devices like radios if its not used, so it should be used.
As other contributors have said, the ring is there to help reduce RF interference. Where it will do the most good depends on the installation. I think it is more likely that the case manufacturer intended the wires to the front panel to go through it; the power supply should already have all the RF cleaning it needs. The way the ferrite ring works is that if a signal through the outgoing wire is balanced by that through the return (earth) wire, there is no net current and the ring has no effect. If the signal isn't balanced because some leaks to earth elsewhere, then the residual current is suppressed by the ring. Most of the computer case is well screened, but the leads to the front panel pass through the screening and provide a source of EMI (Electromagnetic Interference) to other equipment. In a domestic situation with only one computer this is unlikely to be a serious problem, but in a commercial installation there may be many hundreds of computers and the EMI problem could be significant. EMI regulations are quite stringent and manufacturers have to demonstrate compliance to be able to put a CE marking on their equipment and sell it in the EEC.
This thread is now locked and can not be replied to.