Using UART in mode 3 means 9-bit (9'th bit is set in RB8 located in SCON).
This means that the connected PC has to configured as follows:
9600,n,8,2 (2 stop bits is essensial here).

Advantiges of this mode, is when i.e. several devices are connected to the same RS232 port (in a sort of serial bus). setting SM2 in SCON, disables the UART to set RI if the 9'th bit is 0. That means that the PC can send data to the devices, but data from the devices will not interfere with the others.