Some months ago I have posted information about availability of Turbo51 - a free Pascal compiler for the 8051 family of microcontrollers.
It features a fast single pass optimizing compiler, Borland Turbo Pascal 7 syntax, full floating point support, mixed Pascal and assembler programming, full use of register banks, advanced multi-pass optimizer, smart linker, generates compact high quality code, output formats include binary, Intel HEX and assembler source.
Now Turbo51 can generate absolute OMF-51 extended object file needed for source-level debugging. You can use Keil uVision, Silabs IDE, Raisonance RIDE or any other IDE/debugger that supports OMF-51 object files.
http://turbo51.com/
Igor