OK, let's go through this step-by-step.
First of all, you should have downloaded and installed the Prolific Serial-to-USB device driver and installed it on the laptop.
Next, after powering on the laptop, you should be connecting the USB-Serial cable between the AVR and the laptop (USB end at the laptop, of course). When you plug the cable in, you should get a pop-up on the laptop saying "Device driver installed successfully" (at least on Windows 7).
Now, you would launch the Pro software and select your AVR from the list of supported AVR's. After doing so, you should get a pop-up allowing you to select a Com channel for the connection, e.g. Com3 or Com4, etc.
After selecting the com port, the Audyssey Pro logo should be displayed on your monitor screen. (BTW, this would indicate that the Serial-to-USB connection is working) After 15-30 seconds, you will be prompted to enter the license key.
Assuming everything is OK to this point, you will proceed through several configuration screens and arrive at the subwoofer level-checking screen, which is the first time the mic will actually be used. And yes, the red light on the mic amplifier should be on at this time. You should also have connected the output cable from the mic amp to the left AUX IN front panel connection on the AVR.
Did you get this far? If not, exactly where did it fail, and can you provide a screen shot of the error message?