That's a good point too. If you're connecting the I-Pac via PS/2 then it looks to the PC just like a normal PS/2 keyboard. Back to my original note about whether you see keystrokes appear in Notepad, if you're able to make a DOS bootable floppy disk, boot with that directly to a DOS prompt and see if keystrokes appear at the DOS command prompt when you press the buttons on the I-Pac. Again, make sure you have at least one button hooked up that generates a genuine character that you can actually see and not something like a CTRL, Shift, or arrow key. If the characters do not show up, then the PC hardware itself is not recognizing the I-Pac and it has nothing to do with Windows.
This test may or may not work if you hook up the I-Pac via USB depending on whether your PC supports USB keyboards at the BIOS level.