-Use "data" for variable allocation (when possible).
Yes But, On ones that matter. Like a Loop Counter for example.
-If not: use "idata".
Yes
-Pointers to "data" work faster than those to "idata" variables or generic pointers.
data /idata pointers are the same. generic pointers are always bigger an slower (in Keil).
-Time critical flags better stored in "bit" area.
No, Bits are bits they are always in the bit area. Putting a Byte in the bit area is a different story.
-Reentrant functions may be necessary, but not time efficient.
It you need Re-entrant functions maybe you need a bigger CPU. There are many downside to Re-entrant functions using an 8052 and Keil. (It does work)