If you select this Install Source, the Plugin Manager will download Madkit Plugins from a web repository (http://www.madkit.net). This lets you install the most recent version of the plugins.
If you select a custom install, only the plugins you selected will be downloaded.
If you don't have an internet connection, you can download a madkit Bundle File (ca. 27MB) and install the plugins form that file. Don't unzip the file directly, use the plugin Manager or this installer, otherwise it will impossible to update the plugins from the internet in the future