To my knowledge your baseline metabolism is/are the calories you burn from just being alive, to keep your organs functioning and to perform your normal daily activities. For instance if you get up, go to work and sit at a desk all day, come home, cook dinner, watch tv and go to bed. Nothing extra- just what you normally do in a day.
I don't know if there is a difference in the methods. I think I used the second one. It asked what kind of lifestyle I have. I sit at a desk all day so it was very sedentary. I don't burn near the calories that someone does who works in say a retail position, standing and walking all day. I was always envious of mailmen, ups etc. Can you imagine the exercise they get in a day??
Hope this helps!