Yes, optimisation can cause you big trouble when debugging!

Although your source code contains a line "a=5", the optimiser may have moved or even deleted it!

Having said that, I haven't had any such problems debugging with Keil's uVision v2.07 and their C51 v6.03 compiler.

You seem to have quite an old compiler?

You can get a free CD from Keil which includes all the manuals in PDF, and evaluation versions of all the tools.