hi
here is simple code for 89c51rd2bn mcu from philips,timer0 not
interrupting timer1,although timer0 has higher priority where
is mistake

org 0000h
sjmp program_start
org 000bh
sjmp timer0
org 001bh
sjmp timer1

program_start:
mov ie,#10001010b ; enable timer interrupts
mov tmod,#11h ;16 bit mode of timer1 & timer0
mov th0,#0ffh
mov tl0,#9ch
mov th1,#0ffh
mov tl1,#9ch
mov iph,#00000011 ;interrupt priority level
mov ip,#00001001 ; timer0 leve2,timer1 level1
setb tcon.6 ; start timer1
there:
sjmp there
timer0:
cpl port3.1
mov th0,#0ffh
mov tl0,#9ch
reti
timer1:
setb tcon.4 ; in timer1 start timer0
infinte_loop:
cpl port3.0
nop
nop
nop
nop
nop
nop
nop ;infinte loop timer0 should
nop ;interrupt timer1,beacuse of
nop ;high proirity to generate
nop ;square pulse at port3.1
nop ; but there is no pule at port3.1
nop ; pulse is there at port3.0
nop
nop
nop
nop
sjmp infinte_loop
reti