WHY MIROCONTROLLERS RULE THEIR NICHE
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Matt said wisely:

"It seems to me that the main reasons people use microcontrollers in their designs are, to keep component count down, to keep complexity down and to keep cost down."

I'd say that there is something else at play.

Microcomputer designs were used in the past because we only had small and medium scale integration chips to support the microprocessor. So the chip count was up but not their "IQ" and so moving RAM and ROM into a micro had little effect. The first LSI/VLSI were designed to interface with that bus-view world.

These days the level of chip specialization is incredible and this makes micrcontrollers most feasible. Each chip now takes upon a greater portion of the task and their interface is usually simplified to a SPI(yuck),IIC(bravo) or other serial interface. Serial works very well with microcontrollers.

And the microprocessor itself is used to do in firmware what was once done in circuitry. In my days designing for "Mass-Market", as long as the microcontroller had unused I/O pins, we considered it to be in "circuitry-eating" mode. We'd look for ways to remove circuitry and handle its function in code or anti-circuits (don't ask :-)

These days all you need to do is find the right chip by browsing EVERY vendor over the internet. Design houses that rely upon sales reps, will fall behind.

WHAT IS AN 8051 GOOD FOR?
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If a design engineer is good at his craft, careful consideration would lead you to conclude that you can do anything with a microcontroller (within reason: no quantum singularity PONG games and no sonic interfaces for elephants in space).

The microprocessor is nothing but a peice of our brain operating a machine. We put the smarts into it. Its is a nearly perfect process-robot following a plan we envisioned. As such, "typical applications" would be meaningless.

And as a businessman, I stay away from "typical" because that means many competitors can do it and the profits are diminished. I like using the 8051 to do what is typically considered impossible on it. I look for applications wherein a lot of heavy duty calculations have to be accomplished BECAUSE that is what most coders do poorly.

If you rely upon math.lib, you can't follow me. :-) heheeheh

-Jay C. Box