If you set this directory, when StatementReader is launched, it will check it for software updates. If a version update is available it will execute and install it automatically.
In a shared environment the administrator may set a network shared folder (e.g. X:\Updates\) specifically for the purpose of streamlining the installation of updates to his users. If you leave this option as Null then you will need to manually download and install software updates. You only need read access to the updates folder.