It may depend on which menu you're looking at and which operating system you're using.

Tools|Options|Composition refers to the old-fashioned menu bar across the top.

You can use alt or F10 to make this menu appear temporarily. Go to View|Toolbars and tick the checkboxes if you want it permanently on show.

If you're using the new-fangled "Application Menu" button (with three horizontal lines - see the attached image) then it's probably Options|Options|Composition - I say "probably" because I'm using Linux where "Options" is replaced, I think, by "Preferences". Another complication with this infernal Application Menu is that different things happen depending on if you click or hover. Hover on the first Options and the second will appear after a while.

See http://kb.mozillazine.org/Menu_differences_in_Windows,_Linux,_and_Mac for differences in the menus between Windows, Mac and Linux.

Thanks, the trick seems to be knowing that the check box under "Options-options-composition" has an unclear label. The label currently there: "When using paragraph format, the enter key creates a new paragraph"

really means:

"Uncheck this box to switch the default from paragraph format to body text format so the enter key does not skip a line (i.e., so you can get 100% single spacing) in your e-mail messages"

The label currently on the check box does not really suggest that it will give you 100% single spacing, but I just tried it as a more or less random attempt, and it works. The real fix is probably to re-label that check box with text that more clearly describes what the check box does.