There's a truly dizzying array of choices. For example, there are funds that invest just in stocks. There are funds that invest just in bonds. There are funds that invest in both stocks and bonds all over the globe. There are funds that invest just in tiny companies that whittle wooden birdhouses in Slovenia. (OK, we made that one up. But it's probably on its way.)
Needless to say, all this variety can make you insane. Don't let it. When it comes to investing for retirement, you need only a few basic kinds of mutual funds - and, if you really want to make things as simple as possible, you can get away with just one fund. Yep, just one. For more, see Is there a single no-brainer investment for my retirement?