"So if I understand correctly, you only want the lights on WHILE receiving mydata=%01011001
HIGH 1 otherwise you WEND want it to stay Low, Correct?"

yes that is correct.

One thing though, I checked the circuit to make sure that is was the processor keep the led on and the output pin is High, while checking the pin I just wanted to make sure that the voltage coming from the output was correct, it is. Looking at the same pin with the scope there is some noise, so I switched from a switch mode power supply to a gel cell (12v). I am using a 7805 regulator with 10uf electrolytic on the input and .01 disc on the regulators output to ground. The noise is still there. Perhaps a cap between the VCC and Vss of the Pic will clear up the rest. I have change processors on both the tx and rx side to rule out a defective one just in case static damage them. On the 4mhz crystal I am using 33pf caps to ground.

I will explore realterm tommorrow, thanks for that info.

Thanks again