Normal - This allows use as described in the license agreement and free updates to all minor version updates. This means if you purchase a license to use version 1.0 and Tugsoft, Inc. publicly provides a version 1.1 you will be granted license to use that version. But if a version 2.0 is publicly provided by Tugsoft, Inc. and you purchased a license for 1.x you will have purchase an upgrade to be licensed to use version 2.x. (Price is: $15.00US)
Upgrade - This is used to upgrade your current version license to the next major version. So if you licensed 1.0 (with Normal) and 2.0 became publicly available and you wanted to license it you would choose this option. NOTE: Currently this option is not available as there is no version 2.0.