Actually I just LOVE the MCP23008 from Microchip... you could do it with that too (using LCD 4-bit mode)...

I find that the skinny DIP (16F876/P type) is a nice economic package... but sometimes you just plain run out of I/O's... the 40-pin plastic package (16F877/P) takes up far too much real-estate and additional expense, so adding I/O's with the MCP23008 or 20016 is a very easy and neat solution - and they've got weak pull-up's too! Just perfect for remote Keypad/Display interface applications.

There's a lot of ways you can do LCD down two wires... (the obvious is to put a PIC at the LCD end), but at only a few cents for the package, the 74LS174 method (strictly it's 3-wires if you count Ground) has to be the rock-bottom cheapest.

PS... nimonia... use the same timing as PBP's LCD defines.