Thanks again guys for all of your feedback!

At this web-site I read the following and I can get it to work
for converting BINARY to GRAY.
The article continues to explain that I can convert
GRAY to BINARY by doing the same function 2^n-1 times.
But I must be doing something wrong in my code. Take a look.

Here's the link to the article. Maybe I am not reading it
correctly.
http://www.dspguru.com/comp.dsp/...ayconv.htm

**** This works, correctly "BINARY-TO-GRAY" ******

;Convert a Binary Number to Gray Code
;XOR the Binary Number with a copy of itself
;that has been Right Shifted (RRC)
;Example: Binary Number = 0EDH = 09BH Gray

	MOV    BINARY,#0EDH
	MOV    A,BINARY
	RRC    A
	XRL    A,BINARY

**** DOES NOT WORK "GRAY-TO-BINARY" ******

 	
;A tricky Trick: for up to 2^n bits, you can convert Gray to binary by performing (2^n) - 1 binary-to Gray conversions. All you need is the function above and a 'for' loop.

        MOV 	GRAY_CODE,#09BH 
	MOV 	R1,#255
LOOP:	MOV 	A,GRAY_CODE
     	RRC  	A
	XRL 	A,GRAY_CODE
	MOV     GRAY_CODE,A
	DJNZ 	R1,LOOP