This instruction is an example of the 8048 heritage in '51.
It works simply so that it emits the value from Ri to low address bus, while the high address bus (=P2) remains unaltered (=P2).
So if you have an external data memory connected in the standard way, by

   mov   P2,#LOW_ADDRESS
   mov   R1,#HIGH_ADDRESS
   movx  A,@R1

you read from the memory in the same way as if you performed

   mov   DPTR,#LOW_ADDRESS+256*HIGH_ADDRESS
   movx  A,@DPTR

Caution, this does not apply for some of the derivatives having "internal external" XRAM, where it usually accesses only the lowest 256 bytes of the internal external XRAM (e.g. the 8xC51RDx sub-family, e.g. AT89C51RD2).


As for your second question: IRAM is the indirectly accessed RAM (i.e. by mov @Ri, or as a stack), which consists from the lower 128 bytes which are also directly addressable, plus the upper 128 bytes which are not directly addressable (not present in 8051).

Jan Waclawek