From my experience, it is always best to buy electronic parts new. And once installed, many things can happen to these type of parts. (dealer here won't even take returns on electrical items because of that reason) I hate to say it, but there may be a problem with the PC III.
I installed a power commander on my '02 R1, and I have not had any problems. I was advised to make all adjustments to the maps within the DynoJet software, and NOT via the manual buttons. (the buttons cover a wide range, and don't give you the fine tuning capability, therefore, it works against what the Power Commander is meant to do).
You may want to make sure that you have all of the wires connected properly. If you do, and the problem persists, I would bet that the guy sold you a bum unit..
Let us know how it turns out. Good Luck Bro