Ofir,

There are two mistakes in your code.

mov a,00
start:
inc a
clr 80h
setb 80h
cjne a,11111111b,start ; ß---
end. ; ß---

1) The 11111111B (or 0FFH) address belongs to SFR, you can not set it. So you have not to compare it with accumulator.
2) What will do your code when by chance Acc = (0FFH)?

This modified code you can see on the scope:

ORG 0100H
FIRST: MOV A,00
START: INC A
CLR P0.1
SETB P0.1
MOV P1,A ;IT IS UP TO YOU
CJNE A,#0FFH,START
JMP START
END

George