In Enclose Setup assistant, and when adding a server in Server Preferences, it is possible that Enclose was previously used with this server and there is an existing Enclose folder.

If you choose a server folder already containing a folder named “Enclose” which contains files, the setup assistant asks if you want Enclose to manage those files. This is useful if you set up a new installation of Enclose and were not able to retain the Enclose database containing your server and file settings.

If you choose Yes, Enclose treats all files in the folder as having just been uploaded, and schedules them for eventual removal according to your preferences. If you wish to keep any of these files, be sure you have backed them up elsewhere outside the Enclose folder. These files will be deleted automatically as scheduled.

If you choose No, Enclose ignores the files. This may be useful if you configure two copies of Enclose on different Macs to use the same folder. However, a separate folder for each Enclose installation is recommended. You can rename the Enclose folder in one installation in Preferences.

If you are seeing this in Enclose Setup assistant, the next step (except for MobileMe), is
Email Setup.
Existing Files on Server