I must be obtuse, I cannot find the new opitimization levels in C51 v7.0. Here are my Help->About stats:
uVision = 2.30 C51 = 7.00 A51 = 7.00a BL51 = 5.00 LIB51 = 4.23 OH51 = 2.6 S8051 = 2.30 DP51 = 2.30
Perhaps you could add your experiences to this thread when you're done: http://www.keil.com/forum/docs/thread1481.asp