Overflow is correct. You must select the folder "that contains" the i386 folder.
Then below your folder path DriverPacks BASE will display the version of Windows that you have selected.
If you don't see that, then you didn't pick a valid source directory.
For your question regarding settings:
The DriverPacks BASE allows you to load different settings files for different types of builds. This may save you time if you do lots of different tests (like us) so you don't have to check/uncheck all the different options for each settings page. By default, DriverPacks BASE saves your previous run as DPs_BASE.ini and loads that automatically the next time you run it. This gives you the option to "override" the default settings.
Hope that's more clear.