The administrative mode is meant for a multi user system, where one user with (usually) administration rights is responsible for updates and installation of new packages etc., but apart from the admin installation users can add their own local TeXMF tree. The big caveat and source of most problems is: From this moment on, where a user refreshes his filename database (FNDB) in user mode, he will not see any update done by the administrator, until he does once again an own refresh – also if he didn’t add an own installation path!
For the admin mode you have to add the switch
--admin to the commandline instructions or on the Start Menu you must use the Administrator Setup.
Constrastingly the user mode is thought for a single user environment or for users with low rights in a multi user system (but also users with installation rights could use this mode); users with low rights can install MiKTeX only into the user profile, I would suggest
%APPDATA% – MiKTeX adds later anyway under
%APPDATA%\MiKTeX\<version>\ configuration files and also all packages installed by “installation on the fly”, cf. Changing the location of auto-installed packages in MiKTeX.
In this mode every user has just to take care about one installation, the refresh is much more simple (local TeXMF trees can be added as well).
Therefore if you are the only MiKTeX user on your system, I strongly recommend to choose the user mode installation.
(See also Ulrike Fischer’s answer to the question What is the preferable setup for MiKTeX to keep all packages up-to-date easily?)
How to change from admin to user mode? (Or vice versa.)
As far as I see only by re-installation (admin mode is only possible after “installation for all users”, respectively “installation only for me” lets you automatically work in user mode), but you can use the already installed package files, for this purpose see my own answer to the question Relocate MiKTeX 2.9? (for user mode don’t forget to leave out the
--admin switch). If you switch from multi to one user installation, you should also delete the folder
%ALLUSERSPROFILE%\MiKTeX (since Windows Vista) or
%ALLUSERSPROFILE%\<Application Data>\MiKTeX (until Windows XP, the string
<Application Data> is language dependent), but make a safety copy first e.g. with a file archiver, especially if you had made manual changes before.