Simulation Software Embedded Systems

I would like to know which simulation software is the best for embedded systems ?
By the way, I'm doing a project using 8051...
Thanx is advance...

The days of absolutely requiring a simulator (or an emulator!) are thankfully over. These days, a development board is very cheap.
Otherwise, a microcontroller just costs a few dollars, so it is easy to quickly create a simple testbed to be able to test out things rapidly.
Nowadays if there is a problem, it can be debugged at a higher level than requiring to look at program counter and register values.
For example, you can test out C code snippets directly on any Windows or Linux machine for free (using GCC or similar)
(and unless there is a strong reason otherwise, you really should be coding in C, not assembler). For testing out larger parts (or the entire
system) you can write a 'harness', for example using text files containing expected input and output. Even if you were writing snippets
of a kernel in assembler, I probably wouldn't use a simulator.
Note I'm talking about a microcontroller simulator. If I wanted to try out algorithms for example, then absolutely I would use software
like MATLAB or even Excel! Whatever works for your purpose. I tend to write lots of test programs in C or C++ to run on a Linux or Windows machine
to try out things, because I can easily pass values in a text file (Other programming languages make it easy, I'm just more comfortable with
these languages).
I can see the value of a simulator if there is a large class and it is impractical to have individual development boards. But you can see
many threads where simulated results are quite different from real life, so given the choice, run on real hardware, or compile to run on
Linux or Windows.