Mr. Karas, I was reading your answer, you said
1) The E line that goes to the LCD probably needs to be a single function output from the microcontroller.
I'm not sure I get it right, but I interpret it as one pin should be devoted to E line of LCD, (of course, It is ideal). I'm currently designing a board that a 8051 microcontroller attached to a LCD, Keypad, Printer interface, LED driver, other microcontrollers,... via 74HC245 bus transceivers. all LCD lines including E line is controlled via a 16 bit bus, I pulled down the E line at other side of bus (LCD side) via a 5K resistor (it works!). do you see any problem with that design? when you said that it needs to be, are there other reasons ? the only problem that I'm a little worry about is the bus overshoot and undershoot and I fear that in long run it may damage ICs so I'm thinking about using 74245.

regards,
Obalid