In previous versions of the extension, you always had to explicitly select a Toolchain version to work with to start developing. This usually happened automatically when the welcome view opened for the first time, but this step was always a bit redundant and fragile.
From this release, no configuration is necessary to get started. If you have an nRF Connect SDK toolchain package, the extension will automatically use the newest version. Otherwise, it will attempt to resolve any native toolchain installations in your PATH, and fall back to using those tools instead.
You can still override the default toolchain by configuring the nrf-connect.toolchain.path setting in the VS Code User Settings, or configure a specific toolchain version through the Toolchain Manager Menu.