The OP introduced himself as new to the field, so let's not start confusing things - Simulators, Emulators, and IDEs are entirely different things:

A Simulator is purely a piece of software that runs on a PC (or other host computer), allowing you to try out your 8051 code without any real hardware. Because there is no real hardware involved, you run into problems where your code relies upon interactions with the real world.
The Keil uVision IDE includes a Simulator.

An Emulator (or In-Circuit Emulator, or ICE) is a Hardware instrument that plugs into your target board - replacing the 8051 chip - where it emulates the behaviour of the real processor.
Thus your code runs in real-time, and interacts with your real hardware.
The debugger in the Keil uVision IDE can be used with a number of emulators.

IDE stands for Integrated Development Environment. It is really just a fancy graphical front-end that provides a single point of access to a set of development tools - such as editors, compilers, assemblers, linkers, documents, simulators, emulators, etc.
Some people love 'em; some people hate 'em...