Rn-42 gibberish output

Hey there.
I recently bought two Rn42 bluetooth modules from sparkfun and am having a really hard time getting em going.
I have read and re-read the user manual verified connections and have it down to just having power and ground connected and CTS connected to RTS on the RN42
I have those connected because in my research and based on the info in the user manual, hardware control is required and is the default setting.
But even with or with out the CTS and RTS connected i get no where.
At first i had the RN42 connected to an arduino and trying to pass characters between the arduino serial port and the blue tooth serial port(rn42)
Well all i got was gibberish out.
Changed baud rate on the terminal connection to the Rn42 and nothing helped.
Tried almost everything i could think of and now i just have power gnd and CTS connected to RTS(pin15 to 16 on the rn42)
I can connect to the RN42 on the computer, type in $$$ and i get CMD in return.
But any thing else i send returns nothing,
No ? for unrecognized commands or AOK for good commands. i have tried to use the GET command D to get the general info about the RN42 but i get no response.
The only response i can get from the RN42 is a ! when i enter a long string of characters ie (eeeeeeeeeeeeeeeeeeeeeeeeeeeeee)
This is true of both bluetooth modules so i figure i must have some setting i overlooked.
THe problem is that i have read over your manual like 4 times trying to find the issue.
Any help would be great.
Thanks
-Erik
PS i know it has to be operator error.
I need that second pair of eyes to help me out here.
THanks

Update:
If i connect the RN42 tx to rx, i get echoed data that matches what i send.
The problem is that the $$$ text for enter command mode still returns CMD but i cant get any other data.
Also, i can connect to the RN42 across different baud rates in my terminal program.
Thanks guys

The problem is that the $$$ text for enter command mode still returns CMD but i cant get any other data.

What are you trying to do after you get in command mode?