You're right, the mentioned "package" option is outdated, there is no such thing in VL7 Light, sorry.
If you browse the install CD, you will find several folders.
The barebone option will install everything in "base" and "packages", and vlconfig2 and vlight-mods from "config", in that order.
Light adds "option1" plus the option1 package in "config".
Medium uses "option2" and the associated config file.
Full installs "option2", "option3" and config files.
You can do a barebone install and remove the packages you don't want with the removepkg command (see which ones are included by looking in the packages folder). Then add whatever you want from the other folders, or use gslapt to build your custom system. For example, gslapt will show an LXDE meta package, which will automatically pull in a selection of packages for the desktop environment.