HElp – re. Static Page

Can someone explain this or provide an answer ? I have just installed WP 2.3.3 and have been using an Ebook to help me with the installation/configuration.

In the book it says :

“From your Dashboard select Options then Reading. You will see the following section at the top

Front page displays : Your latest post
A static page (select below)

Front page
Posts page “

This is not there in the version I’ve got so
a) how do I choose a ‘static page’ instead of ‘latest
posts’
b) Is it important ? (I want to finish up with something that is more like a minisite than a blog).

Any help most gratefully received