The fundamental thing that's missing is a definition of what RS-232 actually is, or any reference at all to the RS-232 standard.
In particular, the distinction between the logic-level asynchronous interface at the UART's IO pins, and the bipolar signalling (among other things) that specifically makes RS-232 - and hence the need for a transceiver (such as MAX232).

Many misconceptions about RS232 are due to a failure to consult the Source Document; ie, the RS232 spec:
http://www.8052.com/forum/read.phtml?id=57912
http://www.8052.com/forum/read.phtml?id=46426

http://www.8052.com/forum/read.phtml?id=24916


Hyperterminal
You should mention that some Hyperterminal versions will let you change all the settings, and will even display the new settings in the status bar, but won't actually use the new settings until after you Disconnect and then Connect again.
This was true of the Win-98 version, at least.
(this is the kind of stupidity that gets Hypoterminal its bad name!)

Some versions grey-out all the options unless you Disconnect before entering the Properties dialogue.
Still not exactly brilliant User Interface design.