I've taken the time to rewrite it bit by bit. I've commented the code as much I think is neccessary and it all seems to work quite well in terms of inputting a value to alter the on/off time. BUT the problem I am now having is I think when I send the values via serial on realterm or the terminal on flashmagic, it is (possibly) interpretting everything as ascii because it just wont work. Code is pasted below :) What programs do people use to communicate over serial?? (with xp) . Cheers! :D

$mod652
org 0h
ljmp init

org 23h
MOV A,S0BUF
MOV TON,A ;load a with the value of s0 buffer
CLR RI
reti

org 100h
;------------------
init:

SETB ES0 ; enable serial interrupt
MOV S0CON,#50H ; SET TO SERIAL MODE1
MOV TMOD,#20H ; SET TIMER 1 TO MODE 2 (8 BIT AUTO RELAOD)
MOV TH1,#253 ;SET BAUD TO 9600
SETB TR1
SETB EA

ton equ r1 ;on time 
toff equ r2 ; off time
mov ton, #080h ; manually set on time to 080h (50%)
jmp loop
;------------------

;------------------
loop:
call makeon
setb p3.7
call delayon
clr p3.7
;call makeon
call delayoff
jmp loop
;------------------

;------------------
makeon:
mov a,#0FFh
subb a,ton ;subtract ton from a (255) therefore giving us the value of toff
mov toff,a ;load up toff with the result of the subb
ret
;------------------


;------------------
delayon: ;this function loads acc with the value of ton then decrements till its zero and returns
mov a,ton 
delayona:
dec a
jnz delayona
ret
;------------------

;------------------
delayoff: ;this function loads acc with the value of ton then decrements till its zero and returns
mov a,toff
delayoffa:
dec a
jnz delayoffa
ret
;------------------


end