Hi Nutty Blue,

Your name sounds like a star and code is working, but if you want 1 minute you must include one more raw instruction.
This is DJNZ R2, Time2. Put this after DJNZ R1, Time1 instruction. I've choose R2 but could be other register. Before get in the delay loop load R2 with #C3H. This way you will multiply with 60 the time spent in all DJNZ loop.
Because I don't know what you are doing with timer2 in your code.
Though it's not bad to use it like you did, as baud rate generator for serial port with clocks coming from outside. Easy to fine adjust the serial baud rate, though I preffer changing RCAP2L and RCAP2H register with timer driven by internal clock.
Here is a code based on George's forum post.

org 2000h ; 1 Minute Program
minute: CLR P1.7
clr tr0
MOV TMOD,#00000010B
MOV TL0,#00H
MOV TH0,#00H
SETB TR0
Min1: MOV R2, #3CH ;I took off the initialised instruction from the loop
Time2: MOV R1,#25 ;and load R2 with 60 decimal
Time1: MOV R0,#160
Time: JNB TF0,Time
CLR TF0
DJNZ R0,Time
DJNZ R1,Time1
DJNZ R2, Time2 ;here is multiplied with 60
CPL P1.7
AJMP Min1
END

You can use this only as test purpose. If you want to use it in a program as "CALL minute" instruction, be aware that the code is never ending loop.

Regards,
Silviu