The Start Mail Merge item would be used if you wanted to produce a number of
envelopes with the names and addresses for each coming from a data source
that might be a table in a Word document, and Excel spreadsheet, a table or
query in an Access database, etc.

The other item would be used if you just wanted to create one envelope and
in that case, a dialog box opens into which you insert the address that is
to appear on the envelope.