Right, that's narrowing things down a little.
Your final comment about "bad software" coming up on the display suggests that some of the firmware installation files from step 1 are missing. For step 1 above, Richard chimed in earlier to say that you do need to switch off and on at the rear during firmware loading, which I'd forgotten. Ian's post also links to the 2.5b9 installation instructions which refer to rebooting. I'd recommend using WinFUP again to reflash the firmware. Did you definitely click on the .mfp file, and not a .mfu file? If it was a .mfu file, the machine would behave in exactly the way you now describe. Disconnect the serial cable before Typing the unit.
At step 2, you said that you weren't sure whether to switch off, or hit the off button, but you'd disconnected and reconnected the serial lead. Did you do either before disconnecting and reconnecting the serial lead? The manual states that after setting a Type, you press the standby button, so worth repeating all of step 2 as well.
At this point, you should have properly installed firmware, and a Type set up. This is when to load up that settings file which you've already created.
Let us know how you get on.
Cheers
George