Can you send working commands from the PC using a terminal?(hyperteminal or something like it, not the softeware that comes with the device)

If not, then the problem is elseware. If you can not send with a teminal, get a program that monitors the serial port (google serial sniffer, some are free) and see exactly what is being sent between the device and the standard program for the display.

And what about handshaking?

Again, I am not sure about the two stop bits, but that may not be the whole problem.