This dialog shows the folders that exist on the datacenter that is shown in the Datacenter field.

Pick a folder from the list of available folders. The restored virtual machine is placed in this folder.

If two datacenters of the same name exist in the vCenter server, all folders for the identically named datacenters are displayed. After you select a folder and click OK, verify that the Folder path shown on the Recovery Options dialog indicates a folder on the datacenter that contains the destination ESX server. If the selected folder is on the wrong datacenter, the restore fails.