If you choose the second option, MEME assumes that each sequence may contain at most one occurrence of each motif. This option is useful when you suspect that some motifs may be missing from some of the sequences. In that case, the motifs found will be more accurate than using the first option. This option takes more computer time than the first option (about twice as much) and is slightly less sensitive to weak motifs present in all of the sequences.
If you choose the third option, MEME assumes each sequence may contain any number of non-overlapping occurrences of each motif. This option is useful when you suspect that motifs repeat multiple times within a single sequence. In that case, the motifs found will be much more accurate than using one of the other options. This option can also be used to discover repeats within a single sequence. This option takes the much more computer time than the first option (about ten times as much) and is somewhat less sensitive to weak motifs which do not repeat within a single sequence than the other two options.