To run the Windows 10 Anniversary Update you'll need a PC with 2GB of RAM and 20GB of internal storage (that's for 64-bit, for 32-bit you'll need 16GB).
The desktop version will run on devices with screens larger than 7in, while the mobile version works with devices that have screens up to 9in.
Assuming you're trying to upgrade the PC you're running the tool on, choose Upgrade this PC now.
Back in 2016, during the run-up to the Creators Update, the software giant considerably streamlined the size of update downloads (by switching to a differential package, rather than a full download of a fresh build).
Whatever progress can be made in terms of reducing download size and install times will obviously be welcome, particularly in the latter case because when the PC is tied up during installation (with lengthy reboots, while watching that percentage counter), there’s nothing you can do with the machine – which can be frustrating.
If your PC is already running Windows 10, it will run the Anniversary Update.
If you prefer, you can download the Anniversary Update entirely manually.