Dear John,
Thanks for using my code.

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MOV R0,#60H ; POINTER FOR THE DISPLAY
MOV SP,#40H

Why #60H and #40H?
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R0 is used as a pointer to store the received data from the terminal. Starting from 60h u start storing them. Its only for debugging purpose and for nothing else. If u donot want to store the received data in the ram u can remove the following 3 lines in the code
MOV R0,#60H ; POINTER FOR THE DISPLAY
MOV @R0,ACC
INC R0

and about ur doubt regarding MOV SP,#40H.
u can even use the SP with 20H or what ever SAFE value u can think. There is abs no problem with it. I just assigned it with 40H and there is not much significance.Donot worry about stack overflow bcz u donot have too many calls,returns and interrupts in ur case.

Hope i am clear...

good luck
-sathish