Sounds like the driver isn't working properly. Unfortunately I'm using Win98SE so can't help with XP. I'm still using the 1.85 CBX driver and it communicates OK with my PSR-740. I found that the port settings didn't matter as the CBX driver sets the port parameters dynamically when it's activated. I wonder if the 1.85 driver would work with XP. No harm in trying as it's easily uninstalled. PC2 is the correct setting as it runs at 38400. PC1 runs at midi speed (31250) so don't try it with the to-host connection as the com port won't run at this speed.

Bryan