1) you do not state that the LED is between gate output and Vcc or is between gate output and Gnd, but the your description makes me guess it is between gate outpur and Vcc.

Since you have a buffer gate, move the LED to between gate output and Gnd (remember to turn the LED. Another method would be to change the invereter (I assume that is what you mean by "not gate") with a non-inverting buffer chip.

2) the fact that port pins are high during reset is in the datasheet (or, if omitted in the datsheet, in "the bible") there is nothing you can do about this. This is FUNDAMENTAL KNOWLEDGE, so I suggest you take a read of "the bible" to increase you basic knowledge of the '51.

Erik

here are the links to "the bible"
Chapter 1 - 80C51 Family Architecture:
http://www.nxp.com/acrobat_d...ARCH_1.pdf

Chapter 2 - 80C51 Family Programmer’s Guide and Instruction Set:
http://www.nxp.com/acrobat_d...UIDE_1.pdf

Chapter 3 - 80C51 Family Hardware Description:
http://www.nxp.com/acrobat_d...WARE_1.pdf