Hallo Ashwin,

8051 was invented by INTEL many decades ago. Up to today, companies have improved old (but not oldfashioned) design. How an improvement can be realized? Very easily, by adding additional features. Means, all derivates use the same core, but add some new details, like watchdog, programmable counter array (PCA) and such stuff. The idea is to give the user a high skilled tool in hands, best optimized to do it's job, but nevertheless being an 'old hat' for someone who has already worked with a '51 microcontroller.
'51 has become so extremely successful, that many manufacturers are fabricating microcontrollers in license, given by INTEL. And all these manufacturers try to add some specifics of it's own company, a detail were they are high skilled. So, ATMEL was the first to add FLASH memory AND to achieve very low price. Siemens, now infineon, was less successful, because they had no cheap micros with built-in ROM. But just this to have is very important for professionals wanting to hide their software.
Since some years a certain trend can be seen. Away from parallel programming to certain in circuit programming. Why? As applications become more complex, at the same time software has to be matched and adapted more often. And for many applications only having parallel programming possibility is a big stone at neck of developer.
I would not go so far as Erik, who says that parallel programming will disappear, but micros with ISP are becoming more and more important. So, it would be wise to learn ISP programming in next future, when you really need this feature.

It's interesting to note, that meanwhile ATMEL is no longer recommending classical AT89C51, but AT89S51. And, surprise, this chip features ISP programming.

Have a good look at the letters following to classical name. Letters like 'RC+' or 'RD2' are very important. Differencies can be drastical. And although their is the same good old core built-in in all derivatives, having a very good look in their individual datasheets is real essential.

Bye,
Kai