Yeah, that works. HD has this one too
http://www.homedepot.com/p/DANCO-0-1...4352/100180536
The test is of the water jacket, not the combustion chamber so the spark plug hole is not involved. Using the example gauge/valve assembly on the manifold, adapt the threads to fit a water inlet on either end on the top, plug the other one and pump up to [insert preferred pressure here] psi. 20 psi is frequently mentioned on this forum but I think that's excessive considering our cooling systems operate at much less (4 psi or so for FWC, 0 psi for RWC). I'd suggest 5~10 psi for a reasonable test.
A manual air pump is all that's needed. If you're using compressed air, be careful. This is intended as a diagnostic test, not a destructive one.