You enjoyed my answer in the MSDN Forums so much, I’m posting the link to the answer here as well. 😉
If you are publishing and installing from the same URL, you can just fill in the publishing file location and be done.
The reason there are two is so if you want to publish to one place, but have an installation URL that’s different, you can do that.
For example, you might want to publish to your server using ftp, in which case the publishing file location will be ftp://myserver/myvirtualfolder/myapp and the installation url might be http://myserver/myapp
You might want to publish to a folder on your local disk and do something to the deployment before pushing it to the webserver. In this case, you might publish to C:\_Publish\MyApp\, add some files, re-sign the manifest, and copy it to \inetpub\MyApp\, and the installation url would be http://myserver/myapp