Some of you that are new Mac users might not be familiar with the different install options that are available when you have to use your restore disk or when you upgrade to a newer version of OS X.
Apple has posted a Knowledge Base article that explains this very nicely, Mac OS X 10.4, 10.5: About installation options
When you're ready to install Mac OS X 10.4, 10.5 or later, you may notice that you have several installation options available to you while started from the Install disc. If you prefer not to custom install, simply install the software using the default installation.
If you'd like to see your choices, click the Options button that appears when choosing an installation destination. A dialog sheet appears and presents you with several installation choices, listed below. Here's what each type of installation provides.
Mac OS X 10.4, Mac OS X 10.5