Error when setting XBee IO pins - need help

I apologize since this is not strictly an Arduino question, but I need help configuring the IO pins on an XBee module, and wondering if anyone has overcome this problem.

I am using an Arduino Diecimila with the ATmega chip removed as my USB-to-serial converter. I've connected the XBee to the Arduino board as follows:

XBee Vcc -> 3.3v on arduino TX -> RX RX -> TX GND -> arduino ground bus SLP -> attached to a resistor and LED, then to ground. This is just an "on" light.

No other pins on the XBee are attached to anything. This is the same setup as the diagram on p230 of Making Things Talk.

I have connected successfully to the Xbee via a serial terminal, and was able to set MY, DL and ID parameters successfully, including writing them to memory and seeing them come up next time the Xbee is connected to USB. (ATMY1234 for self-address=1234, etc.) The problem is that I can not set the IO pins. Every time I type ATD02 to set I/O pin 0 to 2, the console says ERROR. I get ERROR on every pin, D2, D3, etc.

I tried it with two Xbee modules and got the same behavior in both cases. Is there anything I'm missing? Do I need to power a pin or something before it can be set? Any ideas appreciated, as this is both baffling and really hard to google for. It's weird that I can set some AT values and not others.

Hi,

What is your firmware version? ATVL

1084, according to X-CTU. (I did some more searching that suggested a firmware issue, and I found the LadyAda page about updating it.) Looks like the latest available version is 10CD and what I'm running is quite old. Do you think the update will fix that bug?

Sadly, though, the method described here for doing the upgrade with the Diecimila didn't work for me. X-CTU kept giving a "Lost connection with modem" error.

I've now ordered the adapter cable and breakout board that she sells. I'm really fervently hoping that a proper physical connection to the RTS pin on the XBees will solve the connection problem. :-/