Programming DS89c450 ISP
RST needs to be pulled up, EA and PSEN need to be pulled down. Whilst advisable, it is not always necessary to insert resistors here. Doing this removes the need for the HC125, opting instead to do it manually. To then use the chip, these three steps need to be undone as they apply only to programming.

Yes, USB to serial (Provided it is of the 5v TTL type, as opposed to the conventional rs232 found in a computers serial port) removes the need for the 232A transciever. This is only required for the computer Serial ports due to their different logic level.

Keil C51 is suitable to programming for the chip, although other packages are available. To flash the chip, the best software to use is the manufacturer supplied MTK which can be downloaded off their website (with a bit of searching). Whilst this software is designed for set serial ports and baud rates, custom ones can be used although compatibility is not allways assured. Check the USB to serial chip for specifications.

To those using a 16Mhz crystal, the only baud rate I could get to function was 16667 on a CH340g USB serial to chip.

I sourced most of this information off the following link:
http://www.edaboard.com/thread27473.html