"make sure you have the TxD and RxD correct. This is one area where it is easy to get confused. The tests you described did not seem to validate that Rx and Tx were sorted out in the correct order. Do this...connect your PC to the trainer and open the terminal program on the PC. Hold down one key so it sends a byte out to the trainer over and over again. Now look at the MCU on the trainer with the o-scope and observe whether the RxD pin is indeed receiving a signal at the proper MCU pin as shown in the data sheet. Now move that setup over to your custom board and verify that the RxD arrives on the same pin of your MCU. " <-already done that

BUT I'll recheck the other 43 pins to make sure they are correctly connected (I'm using the 44pin package--the PLCC44 package to be exact). Yes I agree that sometimes the simplest things are those that procure the biggest problems, and chances are I have that kind of problem. Wish me good luck, I'll keep you updated, your support is really appriciated. Thanks for your reply!