If you select the "Use single archive..." option you must select an archive name. When this option is off, the archive name is specified on the folder list.
Other important information regarding single archives
When adding multiple folders to a single archive, it is very important to specify the "store full paths" switch for the archiver, otherwise all your files will be mixed and duplicates will be overwritten.
If you are using the internal ZIP archiver, this option is set automatically.
Suggested external archiver settings
WinRAR : include the -ep2 switch
WinZIP : include the -rP switch
7-Zip : No additional settings required