This device has built in brown out detect. Will this do, and replace the normal supervisor chip? (I am NOT designing toys!)
yes

It also features built in RC osc. Is this okay, or shall i throw in the normal x-tal?
the datasheet speify a maximum error of 2.5% over the entire temperature range. The philips team specify an unofficial tolerance of 1% at normal temperatures.
also, if you use the UART, you can calibrate the oscillator:

http://www.semiconductors.philips.com/acrobat/a...0167_1.pdf

Erik