Is there a user's forum for the Keil tools and/or the P89V51RD2 processors?
How good is Keil's simulator? Maybe try getting the hardware PWM working in the sim.
I looked at the P89V51RD2 data sheet and I didn't see how the PWM hardware should work. There is a short section on registers for the PWM but no real explanation.
As for software PWM, if the two outputs you need are both at the same frequency then doing two different duty cycles is not that hard to do in the ISR. I have done this with PICs.