To answer the original question: Yes, most of the time that people are talking about getting 1-2" groups at 25 yards is when testing their weapon for its accuracy, rather than their own shooting skill. Therefore, they use benchrests of some sort. An example would be the quarantees given by Wilson, Bauer, etc., of 1.5" at 25 yards for certain models. The guns are tested using a Ransom rest.
2nd question: Yes, an expensive device like a Ransom rest will give you better performance, but only if you know how to use it. A Ransom rest can take almost all the human factor out of an accuracy test. However, Ransom rests are devices that require a certain amount of practice with in order to get that degree of reliability. They're also quite expensive. That said, most of us will be quite happy with sandbags.
For that matter, to get good results with sandbags will take some practice.
The amount of difference between the test with a Ransom rest and the test with an experienced shooter using sandbags is not worth the amount of expense for the Ransom, in my opinion.