Munchkin "Shrieking Geek" Bad Stuff
I would say both.

There is some room for interpretation here, due to ambiguities in the English language, but I would certainly interpret "any Race or Class cards in play" as equivalent to "all Race and Class cards in play."  (Note that you can have several of each, using cards like Half-Breed or Super Munchkin.)  This also matches the first part of the text, which says that you "become a normal boring Human"; if you didn't discard your Race cards, you would not become Human, and, at least arguably, if you did not discard your Classes, you would not become normal and boring.

If you were supposed to choose, it would most likely say something like "at least one Race or Class card of your choice," or maybe "either all Race or all Class cards in play."  But neither of those would really match the "become a normal boring Human" part.