Thanks for the suggestions on setting up hyper terminal,

I did changed it and it did work, but the way it worked I have made the following assumptions, please correct me if I am wrong.

1) As I send data to uC from PC using hyper terminal I do not see that data appearing in hyper terminal window, means for example I send 'F' to uC. I could see that data has been sent as uC does what its programmed to do on recieving 'F' and sends data back but I do not see 'F' appearing in hyper terminal window while typing(sending). Is it normal?

2) You don't have to press enter to send data from hyper terminal? As I press 'F' key its sent straight away and does not wait for ENTER key to be pressed. Is this normal?

one last bit I recieved data from uC as well after sending character 'F'. The data recieved is to display "MOVING CLOCKWISE" in terminal window. The data is displayed perfectly in bray terminal but in hyper terminal instead of "MOVING CLOCKWISE" it is displayed as "MOVINGâCLOCKWISE" means a speacial character is displayed instead of space. Any idea why is that?
I used this command for space

MOV SBUF,#0A0H
JNB TI,$
CLR TI

Once again thanks a lot for your time guys.

Regards
Kaz