In HTML, there are different ways of indicating a paragraph break. When you use the tag <P>, there will always be a gap between the rows to indicate the beginning of a new paragraph. If you do not want the extra gap to be visible when pressing ENTER, you can use the tag <DIV> instead. If you select the check box, <DIV> will be used instead of <P>. Note that the change will only apply to those pages created after this change has been made.
This function only applies if you are using the EPiServer CMS 5 Editor and not the TinyMCE HTML Editor.