Serial is one of those things that may seem easy at first glance but in reality is so complicated that you want to hang yourself. I used to see plenty of job descriptions that required something along the lines of 'knowledge of serial protocols'. What a joke! 8-N-1, 115200bps, nine pin serial connector DONE! And you get BITS out the back end when you're done. Are people afraid of BITS?
Some people are afraid of BITS (I'm looking at you CS majors), but that's not the trouble with serial protocols. The trouble is that 'serial protocols' is really vague. The first protocol you might think of is good old RS-232. It's a lovely standby, 8 bits per message, no parity, one stop bit and your choice of baud rate. Why would anyone want to deviate from that? But what do all of these settings actually mean? It's swell if you have a GUI to enter these values in, but it gets harder when you have to configure a microcontroller with nothing but assembly. And even then what actually HAPPENS when you send a message? What does the waveform even look like? These may be idle questions for you until the first time that something doesn't work and you have to dig deeper than the GUI to fix it.
For instance what are the voltage levels of RS-232? The answer - heh. There is no answer. According to the standard it's supposed to be +/- 15V. That'd be easy except that no one follows the standard!. You might get +/-12V, or 0 and 5V (TTL levels). The scary thing is that most of these work because transceivers are often not too picky about voltage levels. And then when you figure that out you'll be surprised to know that the voltage levels are the inverse of what you'd expect - a '1' is -15V, a 0 is 15V. If you don't know that you'll have at least 20 minutes of confusion.
Add to the fact that even if you've figured out your RS-232, there are MANY more serial interfaces out there - all different. I2C and SPI are synchronous - there's a clock signal transmitted unlike RS-232. You don't have to worry about addresses with RS-232 since you've only got two devices communicating, but not so with the others. And have you even thought about hardware handshaking? Unnecessary with RS-232 but crucial to the others. I hope you can figure out why you need an open collector output with I2C...
And don't even get me started about data representation. Do you think bits are just bits? That 0x35 is always equivalent to 53 decimal? Not so fast. That could be ASCII-encoded which would mean that it represents the digit '5', not a decimal value of 53. If you look at your serial data stream in HyperTerminal the output you are seeing is decoded from ASCII. That means that 0x35 will display '5', not 53 decimal. ASCII encoding is useful when data is being displayed on a terminal, but it's also used in other circumstances where you'll tear your hair out because of it.
For instance many serial buses have packets with headers, footers, checksums, etc. Packets are usually started with 0x02 hex and ended with 0x04. You can transmit the length of the data packet when you send it so that your device will know when to start looking for another one, or you could choose not to. In that case, what if the data you're sending has an 0x04 in it? That would tell the device to stop listening and would ignore the rest of the data. So, you encode all of your data with ASCII. If you need to send the value 0x04 (decimal value 4, obviously) then you encode it to ASCII and send it as two bytes - 0x30 and 0x04. When you receive it, chop off the 3's and push the nibbles together and get 0x04 again, there's your data.
And that brings up another point - nibble order. Do I send the least significant nibble first (the '4') or the most significant ('0')? What does the standard say? There isn't one. You have to be told how to interpret the data by whoever put it together, and God help you if you didn't do it yourself.
Suddenly 8-N-1 doesn't sound as simple as it used to. Yes, it's all just BITS, but they're scary bits. They're bits that mean whatever the person on the other end of the conversation wants them to mean. You have to parse them, reorder them, combine them, split them and take a magnifying glass to them to make any sense of it. Watch out kids - it's a jungle out there.