unsigned int i;
while(1){
   P2=0xff; //if led is in P2
   for(i=0;i<0xffff;i++);
   P2=0;
}

In 'C', you should always use volatile in dummy delay loops like this!

"this will give an approx. of i sec. delay for an 11.059MHz X-tal"

depending also on the compiler, options (particularly memory model), and probably also the particular 8051 derivative (how many clocks/instruction)