This is the beginning of Part 3 of 3. If you need to, you can go back to the previous step located at the end of Part 2.
In the Select your computer's current location window you see now, Windows 7 is asking where your computer is located at so it can setup the proper network security - tighter security for public areas and lighter for private ones like home and work.
Choose Home network or Work network if that applies to you. Most of you reading this will choose Home network.
Choose Public network if you use a mobile computer and you connect to the Internet or other computers away from home. Also, be sure to choose Public network if you access the internet via a mobile broadband network - no matter if you're at home or not.