Insert or update: inserts a new record. If the record with the given reference already exists, an update would be made. Update or insert: updates the record with the given reference. If the record does not exist, a new record would be inserted.
Those sound awfully similar. Does one do inserts first and the other do updates first? What's the difference?
Depends on what you think the probability of inserts vs. updates is. If you think it is likely that you'll be mostly inserting, choose option 1. otherwise, choose option 2. This should improve your overall throughput. If you can predetermine inserts vs. updates...better still as 'upserts' are slow in comparison to choosing the correct action.