Tools > Options > General or menu Icon > Options > Options > General

when new messages arrivee select : 'show an alert' select: 'show a try icon' click on 'customise' button to customise

Click on all Ok's when completed.

there is no tools menu on my version, i am also running windows vista if that makes a difference.

Pressing the alt key or F10 reveals hidden toolbars in software applications.

or you enable them by using: menu icon > Options select all the four toolbars. see image below.

Whenever i close out of the application it does not display notifications anymore, how can i fix this?

If you close Thunderbird then the functions do not work. The program must be open and running.