Translation:That was everything that he needed to use his computer.
Hola barnheart: The "lo" is part of the phrase "lo que"; "lo que" means "that which". So technically, the sentence "Eso era todo lo que él necesitaba para usar su computadora." would translate as "That was all that which he needed in order to use his computer". For better sounding English, we just say "that".
I'm not 100% on this but I could swear I answered this without "in order to" in front of "to use" and was counted wrong. This time I put "in order to" in the answer and was given an alternative correct answer that excluded it. Makes learning hard when the goal keeps moving!