There is a new 8051 C compiler in beta test that beats Keil's compiler by 35% code size, and 14% speed, on the Dhrystone benchmark. And, there is no need to select a memory model or use special keywords to control data placement.
More details here: www.htsoft.com/.../silabs8051beta
Not calling any names here, but that was the compiler supplied by the manufacturer of the chip, [...]
I don't know why I so suddenly start to think about Microchip...
Never worked with any of their products, sorry. But I think there are alternative compilers available for their architectures.
In my case, there was no alternative. And I guess the response from tech support would have been much, much different if I hard worked on a large-volume project (millions of units per year, like ... cellphones) instead of one with a paltry 10k to 100k units per year.
Oh, and nastily enough, the compiler generated completely correct assembly if the debug symbols were turned on (yes, with everything else, including the optimization settings, being unchanged). Took me a while to figure out why I couldn't "reproduce" the error with my debug version, while it was perfectly reproducable with the release version.