Can someone please elaborate on this? I am kinda lost on how writting the value FFh to 20h set
the bits 00h to 07h.

Nitin,

FFh means '1111 1111'. If you move '1111 1111' to address 20h, then bit 00h (of bit space!) is '1', bit 01h is '1', bit 02h is '1', ... , and finally bit 07h is '1'. So, the first 8 bits of bit space are '1'.

Keep in mind that 00h, which means the number of first bit, does NOT mean, that this is located at byte address 00h of SFR. It's located in the byte with address 20h!
The 128 bit of bit space cover the address range of 20h...27h, which is 8bit x 8bytes = 128bit wide.

Kai