You can say N here if you don't intend to connect your Linux box to
any other computer at all.

You'll have to say Y if your computer contains a network card that
you want to use under Linux. If you are going to run SLIP or PPP over
telephone line or null modem cable you need say Y here. Connecting
two machines with parallel ports using PLIP needs this, as well as
AX.25/KISS for sending Internet traffic over amateur radio links.

See also "The Linux Network Administrator's Guide" by Olaf Kirch and
Terry Dawson. Available at <http://www.tldp.org/guides.html>.

If unsure, say Y.