Hi Craig,

To start with, your init sequence seems a bit short; normally, you need to send the 38h twice, & some other bytes as well (check the tutorial!). Also, it's simpler to use the busy bit of the LCD instead of a delay routine - no guess-work!
The easiest way to handle the 2 lines is to set up a 32haracter buffer & display its contents continuously; that way, you know when to send the "display line 1(2)" instructions. The characters received from the serial input are placed in this buffer, using a pointer (value 0 thru 31). If you need to clear the display, send ESC or something & let the rx routine send the clear command to the LCD (cooler than LJMP 0!).

Regards,
Richard