You are right. Option 1 is the way to go. Basically what the two options are telling you is that if you are using one set of speakers with an impedance of 8 ohms, option 1 is the way to go. I beleive that option 2 is telling you that you should use this setting only if you are setting up one set of speakers rated at 4 ohms, or 2 sets of speakers that are rated at 8 ohms each. I hope this helps. Good luck with your new system.