Usually this indicates a problem with the serial port. Check the cabling and the serial port's configuration settings. Make sure you're not running another piece of software (such as a palm or serial-over-IR software) that might claim a serial port or its interrupt.

Can you run a regular ".upgrade" against the player? If that doesn't work, a kernel flash won't work, either. Upgrade instructions are in the FAQ.

Also check the FAQ entry on Hypterterminal and see if you can get hyperterminal to work with the player. If you can't get that working, then the serial flash won't work.