You can create an empty "Main" (or compressed) dictionary, a normal user dictionary, or an auto-correction user dictionary. You must use this dialog to create compressed dictionaries, but since user dictionaries are simply normal ASCII text files containing a list of words, you can use nearly any word processor instead.
If you are creating a Main dictionary, the "Language" and "Copyright or other notice" controls will be activated. The language setting is currently used only to disable English-specific features (such as prefix/suffix expansions) for non-English languages. You can enter a small amount of text in the "Copyright or other notice" edit box; this text is stored in the dictionary file and will appear when this dictionary is opened in the View/Edit dialog.
If you want to place the new dictionary in a location other than the one shown next to the Browse button, press this button to browse to a different location. While browsing, the speller shows not only directories (folders) but also dictionary files of the type you are creating. You can select one of these files and edit the name if you want the new dictionary to have a similar name. If you don't change the name, an existing dictionary will be replaced with an empty one! (The speller will warn you before it does this.) When you are finished browsing, press the Save button to copy your dictionary name and location back to the New Dictionary dialog.