I did a little digging into the UIO board to see how RS-232 signals end up on the DB-25 using the ribbon cable connector on the board. For the UIO, it looks like Pertec implemented the same screwed up wiring MITS recommended in the 2SIO manual: The DB-25 is wired as DCE for transmit and receive, but as DTE for the CTS and RTS signals. If a straight through DB-25 cable is used between the computer and a terminal, then the RTS output from the computer is shorted to both the RTS and DTR outputs from the terminal. These outputs are all trying to drive each other. The two CTS inputs are connected to each with nothing driving either of them.
If you want to use CTS/RTS as handshake lines, you'll have to make a custom DB-25 cable (between the computer and the terminal) that swaps CTS/RTS but does NOT swap transmit and receive. The cable should also NOT connect pin 20 (DTR) between the two DB-25's. Finally, make sure the A-B jumper on the UIO board is NOT installed.
To safely ignore CTS/RTS and DTR, cut the p7-p12 jumper on the SK-2 header and install the A-B and C-D jumpers.
Mike