ok, thanks. i will get an MCU with internal memory but do u think it will be able to take the software i will require for this project?
I do not know what micro (u) think, but I know that e.g the P89c51RD2 has 64k of flash and if you need more than that it is a totally different game.

another aspect of using a chip with internal memory is that all port pins become available for I/O

i am using standard 5mm LEDs with a current of 10mA for the display. as a result i was thinking that the transistors to drive the rows won't be necessary.
There are 2 parametres for port current a) max per pin and b) max for the chip. If you do not exceed either, the answer is yes.

(i.e. both HC574, and the HC138 will be tied to the same data line.
no need see above re 32 I/O pins.

Erik