On the PC end you are going to use a terminal program. It used to be the case that Windows came with an awful program called Hyperterminal so if you have XP or previous Windows I guess the temptation will be to use that and under connection properties you get to set details such as baud rate, parity, stop bits and flow control (make sure hardware flow control is OFF!).
Since Vista M$ (presumably because of anti-competitve business rulings?) have not included a terminal program as a matter of course so you now have a free choice to pick any of the good ones like Brays, RealTerm, TeraTerm, etc all of which have their own serial port setting dialogs where you can specify baud,bits,parity etc. Generally always use 8 data bits and no parity and as I said above you MUST ensure that "hardware flow control" is switched off (because the (simple) AVR end won't be doing it)
The following threads give various suggestions of terminal software to use: