1. Installing SDCC Plug-in for Eclipse IDE

2. Software Required Software Location
J2SE(TM) Runtime Environment 5.0 Update 9
SDCC Small Device C Compiler 2.6.0 
Eclipse SDK 3.2.1
Eclipse C/C++ Development Tooling - CDT (CDT 3.1.1)
eclipseSDCC-1.0.0

3. Installing JRE & SDCC & Eclipse
Download and install JRE
Note – you might already have JRE installed in your machine. Reinstall latest version if necessary.
Download and install SDCC 2.6.0
SDCC is open-source and is constantly evolving. Make sure you download from sourceforge.net for latest working version
Download and install Eclipse

4. Updating Eclipse with CDT
Start Eclipse – and create a workspace
Click on help->software updates -> find and install

5. Choose “Search for new features to install” and click “next”

6. Choose “Callisto Discovery Site”
Choose “Ignore features not applicable to environment”
Click “Finish”

7. Make sure that only “Callisto Discovery Site” is highlighted
and click “OK”

8. Select “C and C++ Development”
Select “Show latest version of a feature only”
Click “Next”

9. Accept the License Agreement and Click “Next”

10. Confirm that all your installation settings are correct
And click “Finish”
Else go “back” and make changes if necessary

11. Installing…. May take quite some time

12. Make sure you restart eclipse when done

13. Installing the Plug-in
Download the SDCC plug-in for eclipse -- eclipseSDCC from
Extract contents into a new folder
Browse into it and copy folders “plugins” and “features” into \eclipse\ folder. (where you installed eclipse before)
Read the help documents in \eclipse\plugins\net.sourceforge.eclipsesdcc_1.0.0\help for tips on how to create a new MCS51family(SDCC) project.