WPAD) is a technology which allows browsers to automatically guess the location of a proxy configuration file and take its proxy settings from there. It is not used much in domestic scenarios but is seen in the corporate context. If this the case for you, select this option and WebMeter will locate the proxy configuration file in the same way your browser used to.
Proxy Auto-config file to specify complex proxy needs. To do this you select the "Automatic proxy configuration file URL" option. This enables a text box in which you can specify the URL which points to the configuration file.