First off, DJB created SID... not krizalid. Second, although SID works... it's not as good nor as noob friendly as Krayzie's softmod packages. Now, with that said... here's the answer for the original post.
Backup M$ Dash option was to make a backup of your stock M$ files just in case you needed to uninstall the softmod down the road (and is important if you want your M$ dash to work with your softmod).
The Patch M$ Dash option is there so you can make your M$ dash work with the softmod package. Go ahead and try loading M$ dash through UnleashX and you'll see how important these items are.
Now, Krayzie is correct in stating you should consult the the people who created and/or support that installer. The HQ forums is where you should be asking for tech support on this installer... not xbox-scene.
SID causes noobs problems for 1 reason... noobs don't like to read. That's also the reason some people have problems with Krayzie's installers. Now go back and research, then post questions in the HQ forum if you still insist on using SID.