I actually read the complete 8052 tutorials section and have allready build some example projects.

With the electrical knowledge I have I always assumed that the output of a pin would have to be connected to the led and the other leg of the led to GND, but it seems to be the opposite for 8051.

READ "THE BIBLE"!!!!

As I believe now the port is at 0 unless you pull it to +5V by writing a 1 to that port pin. Am I right now ?
see above, pay attention to the difference between P0 and the other ports.

http://www.semiconductors.philips.com/acrobat/v...WARE_1.pdf page 4 answer ALL the questions you raise.

THEN READ THE REST

Erik