As far as i know "Download agent package from closest Package Server" will be evaluated by the Notification Server, giving the AltirisAgentInstSvc.exe (the installation service) another download location (was it "-u"? - package server URL/share instead of the NSCap source of the NS).
So there is no real command line option for this checkbox.
More:
http://www.symantec.com/business/support/index?page=content&id=HOWTO36808
and:
"C:\Program Files\Altiris\Notification Server\NS Cap\bin\Win32\X86\AltirisAgentInstSvc.exe" -h