No it won't crash... you'll just ignore the upper 8 bits... it'll work like this...

The first column is initial EEPROM Contents, the second column is after you've added 23 (remember 23 is just an ODD number I've pulled out of a hat), and the third column is what is saved back to EEPROM for the next evening...

Code:
Start	Random	Saved to
EEPROM	seed	EEPROM
Value   (+23)	Value
------	------	--------

0	23	23
23	46	46
46	69	69
69	92	92
92	115	115
115	138	138
138	161	161
161	184	184
184	207	207
207	230	230
230	253	253
253	276	20
20	43	43
43	66	66

etc etc
Since only the lower 8 bits of the word are saved, the saved value can only be in the range 0-255.

Can you see now what's happening in your EEPROM location?

when you get to 253 in EEPROM, you add 23 and W0 becomes 276, but because you're only saving the eight lower bits of W0 back to EEPROM, the actual value you save will be 20...

And yes, with the ODD/EVEN offset, if you use an EVEN offset you will never seed an ODD number, so you can't possibly have more than 128 seed values, whereas if you use an ODD number, you will eventually rotate through all 256 values.

This arrangement gives you a nice seeding whereby the homeowner should never be able to recognise any sequences as repeating themseves... in theory it should be 256 days before the sequence repeats.

Melanie