So to reiterate my original question, is it ok if I simply read the DIP switch on P2 once at start up and without using any MOVX instructions in that part of the code? If it is ok, then I would be best off using the DIP switch to pull a pullup to ground?
If you reiterate, let me do that too.

If you want only 256 bytes of external RAM, the solution by Michael should work. I will, however, guarantee that in some future version of your software you will exceed that. Another thing, if you use C as your language the code will attempt to clear all RAM at startup.

It is a matter of simple physics that if any port pin is connected to Vcc or Gnd (through a dip switch) that port pin will in all cases stay at thet level and thus (save the first 256 bytes of external RAM) external RAM can not be addressed.

Are you really using that old a chip?

DO clarify are you only going to use the first 256 bytes of your external RAM

Erik