Adding a real device can be useful for granting access to a CD or DVD drive, or for mapping an LVM volume or even real partition to a virtual system for increased performance.
If you want the existing disk re-formatted with a new filesystem, select the type from the Filesystem to create on new disk. If you also want it mounted on the virtual system, enter a mount directory in the Mount new disk as field.
If the system is current running, the changes will not be fully applied until the next reboot. Otherwise, they will be applied when it is started up.