As I can see, the keil compiler doesnt use regular stack for functions, and all the local variables inside functions are mapped in global memory. Is there a way, to make it behaive like a normal program should? I.E - create a local variables in ram,and destroy them, when the function ends? Thank you.
Not necessarily. Quite necessarily. The Appnote mentions that. The linker cannot figure out the calling tree on its own, it has to be told (through directives) what the calling relations are. Still ... function pointers are messy. They make the program very difficult to understand for anyone trying to maintain the program. They cause even more issues on a '51. Only use them if they are the only way to do what you're trying to do. (and I doubt the latter applies to a lot of things).
The Application Note describes a way to use tables of function pointers without having to resort to manual OVERLAY directives: "The C51 Compiler and BL51 Linker work in combination to make overlaying the variable space of function easy when you use tables of function pointers. However, you must declare the pointer tables appropriately. If you do this, you can avoid using the OVERLAY directive." (my emphasis). Typically, function pointers used to implement a state machine would be used in tables. "Still ... function pointers are messy. They make the program very difficult to understand for anyone trying to maintain the program." I disagree. A large state machine implemented with switch states can be very cumbersome to maintain; function pointers can be very beneficial here! Whether that makes them a good idea on an 8051, though, remains open to question...