In older versions of ADE the compile was always made to the last folder you compiled to,  In many cases this is probably fine but now you have a bit more control.  When you first create a project file it will use the default values you set in the new user wizard or program options.  This same information will be shown here the first time you compile.  If you want to you can just accept this default and proceed with the compile.  However if you want to change where the bgl files go then you can and the changes will only apply to this project.

• With Project File means that the bgl files will be saved in the same folder as the project file. This means you would need to move them to the sim yourself when you are ready
• To Addon Scenery means that ADE will work out what the Addon Scenery\Scenery folder is and compile directly to it.  This is probably the most common way that people tend to work.  you don't have to worry about moving the files yourself.  However using one of the other options might give you more control
• To Specific Folder.  If you have a specific scenery folder in FS for your work and want to compile to that then use this option.

When ADE compiles a project it first generates an XML source file.  This is what is used by the compiler to create the Bgl file.  In most cases it is not really useful since it's job is done once the compile is complete.  However if the compile fails we need the XML to see what went wrong and some folks like to have the XML available as they work.  This option lets you decide what to do with those source files

• Don't save the XML.  Choose this and the source will be deleted once the project is compiled.  This is the simplest option and means that no XML files are stored on your hard drive.
• With the Project File.  This saves the XML in the same folder as the project file and if you plan to save XML then this is probably a good choice
• With the Bgl File.  Not a very good choice if you are compiling to the sim since it puts XML files that the sim can't read in with the bgl files.  However if you are compiling to another folder first this might be a good idea since the source and compiled files will be stored together
• To a Specific Folder.  Use this option if you want all your source files to be stored in one place away from the project and compiled files.

1. Generally you would want to compile one Bgl file with the airport and scenery in it.  However if you want to keep them separate and have ADE create one for the airport data and another for the scenery then check this option.  The scenery bgl file will have _OBJ appended to the name.
2. Compile Unknown Library Objects.  This option applies to specific airport projects.  By default it is disabled and you won't be able to change it.  However if you load a project that contains library objects that ADE does not know about (Black Box Objects) then you will get a dialog asking you if you want to compile them with the project or not.  This checkbox will then be enabled with your choice.  If you decide to compile them then this will be checked.  Once you have answered the initial question then you will be able to change your answer any time here
3. Keep Terrain File.  Again this option only applies to specific projects and will be disabled by default.  ADE creates a terrain (CVX) bgl file if you have terrain elements in your project file.  If no objects are found in the project file but there is a CVX bgl file on disk then you will be asked whether you want to keep the CVX file or not.  This may be especially useful if you open an Airport Bgl file created by someone else that has a terrain file with it.  You won't be able to see the terrain data in ADE.  ADE will ask you if you want to keep the CVX file.  This checkbox will then be enabled with your choice.  If you decide to compile them then this will be checked.  Once you have answered the initial question then you will be able to change your answer any time here

This is a ProKey function and allows you to decide which groups of objects to compile.  This can save you time when compiling if you are working only on one part of the airport and don't want to compile the other parts.  This article explains more about conditional compile

Click Close to return to the main compile options dialog