A vanilla-plain object
You want that you can drag the object on a page 'as-is'. You do not intend to use it ever as a replacement for an existing page object. You don't want it links to the article, prompts you to select an article to link to, or creates any new article.
Then, in Select/Create, pick Do not link, untick all check-boxes and that's it.
The same result you will achieve if you do not even display the Apply Tool preset dialog box - as the defaults are ok for such purpose.
A object with formats for later use
This means that you want that the formats, you applied on the library object, get transferred into a new article when you decide to create it - and that will not happen when you drag a library object on a page.
Select the first frame of every type (head, body, pull quote, photo caption etc), press F2 to select and apply a format.
Note: for this to work with the new articles, the version 3 of the NewFredArticle script in the Page.vb is required.
An object with local text for later use
This means that you want that the local text, you inserted in the library object, get transferred into a new article when you decide to create it - and that will not happen when you drag a library object on a page.
Double-click the first frame of evert type where you want to put some local text, and then enter text. Optionally, press F2 to select and apply a format.
Select the entire object, and then display the Apply Tool preset dialog box. You can leave all settings as default, and then click OK.
Note: for the formats to work with the new articles, the version 3 of the NewFredArticle script in the Page.vb is required.
An object with formats for immediate creation of articles
This means that you want that the formats, you applied on the library object, get transferred into a new article that will be created as soon as you place the library object on a page.
Select the first frame of any type (head, body, pull quote, photo caption etc), press F2 to select and apply a format.
Select the entire object, and then display the Apply Tool preset dialog box. In Select/Create, choose Create a new article, and then tick Link.
An object suitable for replacement
This means that you want that the library object replaces an existing object on a page. You don't want it links to article or creates any.
Select the entire object, and then display the Apply Tool preset dialog box. In Select/Create, leave Do not link, and then tick Make resizeable.
An object suitable for replacement, with auto-link
This means that you want that the library object replaces an existing object on a page and that it auto-links to the current article.
Select the entire object, and then display the Apply Tool preset dialog box. In Select/Create, select Use current article (if any), and then tick Make resizeable and Link.