On the "Repository Select" screen you will choose a cAos repository mirror to pull the latest updated packages from:
Select a mirror location:
=> 1. Choose from known mirrors
2. Select your own mirror
3. Back to main menu
[1] >
Selecting item one will present a list of main cAos mirrors, so you would choose it if you had a network card installed and functioning (and had no local mirror). There are a number of mirrors to choose from, and even an option to probe for the closest (network-wise) mirror to you (recommended for faster network installations).
Item two allows you to choose your own custom repositories, like a local cAos mirror on your LAN (for very fast network installs).
Item three allows you to exit without selecting a mirror, in which case all packages will be installed from the repository located on the CD-ROM (nice for unsupported network cards that will be supported on first boot).