I am programming an Atmel 89C52 to implement a Rugby MSF (UK atomic clock radio time signal) synchronized clock. It uses timer 2 as a free running interrupt generator to sample the time signal, and also to free run the clock when the time signal is absent. Timer 2 is very suitable for time keeping, because it has an auto reload function, i.e. it does not require any intervention from the software to restart, it just sets an interrupt flag and continues. All you have to do is count the interrupts to derive seconds, minutes, hours. I found that my clock can run without the time signal, to a better accuracy than some quartz watches.

Timer 1 is being used as an interrupt generator to multiplex the 7 segment displays.