Hi Andy!
I have bulit simple controller using AT89S8252. It is using:
1. LCD 4x20 characters,
2. 23 keys keyboard,
3. 3 positions mode switch,
4. absolute position encoder.
All of the code is in Raisonance RC-51. Functions from 1 to 3 (LCD driver, 3 diffrent menus for 3 modes, keyboard reading and recognizing) are using 1708 bytes of memory.
2kB is not so big, but you can write some usefull codes, I think. It is enough for simple controlling functions

Greetings,
Jacek