It seems like the RI flag is never getting set, as the
microcontroller seems to be frozen in a jnb RI,$ loop.
Is that a common thing? I was rather sloppy with how the transmit and receive microcontrollers were hooked up. Do you see any problem with the receive subroutine?

;Receive
RXD:
START_B:
mov tmod,#20h ;t1 in mode 2
mov th1,#0Ah ;9600 baud , should be 3, slowed
mov scon,#50h ;8 bits, 1 start ,1 stop
setb tr1 ;start t1
mov p1,#8Fh ;status
clr P3.7

Again_B:
clr RI ;ready to receive

Here_B:
jnb RI,Here_B ;wait until one byte is RX-ed
mov a,SBUF
mov P1,a ;display
RET