I have never used FIFO mode...

In UART mode I have the jumper as stated above, the two grounds going to ground, 5 Volt pin connected, CTS(pin 10) to ground, RTS(pin 9) to the PIC for flow control, TXD(pin 6) and RXD (pin 8) going to the PIC for data transfer. all other pins are floating.

MCU 8051is not a serial level converter. To connect the VDIP to a PC you will to invert the signal... MAX232 or similar.