I don't know why nobody has replied
How to Test if the Serial Communication is happening or not?
Ans: just use hyper terminal, short pin3.0 and pin3.1 on the development board and type anything if u r able to see letters then communication is ok
How to check if the board is in ISP Mode or not and how to reset it to ISP Mode?
Ans: for resetting press reset button on the development board