I think your question may not be very relevant, as these options are supplied to enable you to connect with an mail server that imposes a certain set of security measures to begin with.
In general, a mail server in your company domain will allow you to connect without credentials. That depends on the thrust level your sys admin assigns to employees. As soon as one of the employee machnes gets infected with spamming software and starts distributing millions of messages to external addressees, anonymous access may be discarded.
As soon as you need valid credentials to relay email messages through your email server (most ISP mail hosts force you to log in before you can relay email through their servers), your email server may require a simple userid/password combination (external email servers use this kind of authentication) or a Windows AD security token (used only within your domain).
On average, you cannot choose. You'll have to provide whatever the email server requires from you before you can start sending emails.
Thank you for the response. I read your comment and I am still a little confused. When I chose "use distribution service account", I was able to distribute PDF report and get system email, but not able to get "Alert" ( Search Recipes | Qlikview Cookbook) emails until I changed the setting to anonymous. Wonder why it made the difference. Thank you very much.