Well I attempted to re-structure my code, I think this is more readable and easier to make data specific changes to if nothing else. As you can see, the variable Checksum is unsigned char volatile. I don't know why this has to be so, but it won't work otherwise. There should be nothing else in the program that would affect it. This routine also takes place within an ISR, (the only only one in the whole program), so I don't know if that makes a difference?
Anyway, Thanks to those who posted to help me. A month ago I didn't really know what an 8051 or "C" was, so I've got a lot of learning yet to do. But I'm getting there, and this site has been a big help so far.

Here's the code as it sits now, which seems to work well.

void ZW_SendButton (void){

unsigned char volatile Checksum ;
char BasicSetFrame[10]; //LEN, TYPE, CMD, NODE, COMMLEN, COMMCLASS, COMM, LASTKEY, TXOPT, FUNCID
int pos; //position within array
char Length = 0xA; //Length of frame, excluding SOF and Checksum
BasicSetFrame[0] = Length;  
BasicSetFrame[1] = 0x00; //TYPE
BasicSetFrame[2] = 0x13; //CMD SendData
BasicSetFrame[3] = IconNodeID; //NODE (Target Node)
BasicSetFrame[4] = 0x03; //CommLen (Length of data specific payload within Frame)
BasicSetFrame[5] = 0x20; //CommClass Basic
BasicSetFrame[6] = 0x01; //Basic Set
BasicSetFrame[7] = LastKey; // Decoded Button Press/Release
BasicSetFrame[8] = 0x05; //TXOpt
BasicSetFrame[9] = 0x00; //FUNCID	
	

  Checksum = 0xFF; //-Initialize checksum   
  while (!TI0);
  TI0 = 0;
  SBUF0 = SOF; //send Start Of Frame
  for (pos = 0; pos < Length; pos++){
	while (!TI0);
	TI0 = 0;
	SBUF0 = BasicSetFrame[pos];
    Checksum ^= BasicSetFrame[pos];
	}
  while (!TI0);
  TI0 = 0;
  SBUF0 = Checksum;       
  
 
  
  
}