Having Serin Serout problems

[Demon]

First time through that logic, what guarantees the initial values of X and A?

9600baud at 8MHz has 0.16% error rate for hardware USART, I assume it should be somewhat similar for software communication.

Internal pull-ups should be adequate. Personallly I'd put a pull-up on all B0 pins; I don't trust myself to configure internal pull-ups properly.

Robert