A frequency resolution of 1 Hz is desired, how to set the frequency resolution?

To get a true frequency resolution of 1 Hz, you need 1 second of the signal in the time domain. Set this in Measurement->Settings…, an example is shown below where 1. Max decay time + system delay is set to 1.0.

If the sampling frequency is 48000 kHz, this means 48000 samples.

The frequency resolution can also be set as post-processing in WinMLS using the time data window (true frequency resolution), do this in Plot->Plot Type Settings->Time Window…. To get maximum true frequency resolution, set the lower limit as low as possible and the upper limit as high as possible. This can be done by clicking the  button as shown below.

Another way is by setting the length of the FFT larger than the time window. This is done from Plot->Plot Type Settings->General Frequency Domain.... Select the  radio button as shown in the rightmost figure below.

If you see the bottom line of both figures above, you see that the frequency separation changes from 2.93 Hz to 0.37 Hz. Note that the zero-padding does not add any extra information, but it has the same effect as an interpolation in the frequency domain. But this interpolation may be very useful. In the figure below the red curve shows the sinusoidal signal at 1 kHz without zero-padding and the blue curve is when using zero-padding. We see that the blue curve detects the frequency to be 1 kHz, while the red curve does not have enough points to detect this accurately.