Close down Hyperterm, and via the control Panel set the COM port properties to 115k, 8N1, NO HANDSHAKING (yes, that's what I thought, too). This is because the serial port is only a 3-wire connection. Restart HT and you should connect; you won't see much except during boot for the consumer image; if you want to fertle around, you'll need to update the firmware to developer from the domestic image.
The reason I didn't suggest changing port settings from within HT itself is that it doesn't always seem to pick up changes when you are already connected.
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One of the few remaining Mk1 owners...
#00015