Thanks for the reply Archangel. In response to your questions...

1. Why are you putting in LCD defines if you are using the USART, Do you want dual display?
The LCD is used just for quick on-the-spot feedback. It was part of another program, so I usually just cut-and-paste it into other programs. The USART is just for debugging purposes. Plus it remindes me of the old BBS days .

2. Since you did not specify which PIC you are using, which port is your PIC equipped to use the USART ? Is it the same as the keypad uses?
At the beggining I stated I was using an PIC 16F877 @ 20 mhz. The hardware USART TX/RX are ports C6/C7 on the 16F877 which are only being used for serial communication. The keypad is is connected to PORTB.0 to PORTB.7.

3. Why did you change the value of the resistors ? I suspect Bruce proved out his design before posting it on his website.
I was under the impression that the value of the resistors were not that important to a certain extent. While researching keypad matrices, a few people stated that any value <= 10k would be sufficient. I had 1k resistors with me at the time so i gave it a shot. I just replaced the 1k resistors with 270-ohm. It seemed to make the problem occur only on one button (row3-col1). While pressing the button repeatedly, the value displayed will sometimes be the value of the button directly below it, but only intermittently.

By changing the 1k resistors for 270 helped eliminate the problem on all the buttons except the one (row3-col1). I still cant figure what is causing this.

thanks again for the help.

Sean