Cholesterol is make in the body by converting acetly CoA (from fat or sugar) into cholesterol using a variety of enzymes (HMG-CoA synthase, HMG-CoA reductase, and a few others only a biochem professor can remember). Unless you have a defect in one of these enzymes (which would manifest as ungodly low LDL or possibly death from failure to synthesize cholesterol derived hormones) ...
YOU DO NOT NEED TO CONSUME CHOLESTEROL WHAT SO EVER.
That being said you do need B vitamins and long chain omega-3s which only come from animal meat which incidently has a little cholesterol. I would not recommend full vegetarianism (the closest you can go that seems healthy is being mostly vegetarian and still eating fish).
If you want good diet advice read up on Dean Ornish and Jack Lalanne. If you want to understand how cholesterol/triglycerides etc. really work read Lippincott's Illustrated Review of Biochemistry (it has a 10 page chapter on LDL, HDL that is the only thing I've ever seen that explains this stuff properly).