If you have an ASCII technology file that has not been compiled into a library already, then you will need to choose the "Compile a new techfile" option. If there is an existing library with technology information associated with it, then you would choose "Attach to an existing techfile" - think of this as "Attach to existing technology LIBRARY". If you do not even have a technology file, then you might use the Stream In process to create one as it performs the stream in operation. You will need a display.drf file also to control the display of the layer purpose pairs - each layer-purpose pair has a "packet" associated with it, and the display packets are defined in the display.drf. If you have already created a library and later wish to compile technology information into it, you can choose Tools -> Technology File Manager -> Load. Also from the Technology File Tool Box you can perform other techfile related tasks.
Hopefully this answers your question?