I have discovered why I thought the 128 byte IO RAM is at 0800 - it seems the memory map (which I have been using) on the online emulator is wrong...
http://www.dougrice.plus.com/dev/seg_mk14.htm
I cannot get the virtual machine to respond well enough to test if it actually implements it wrong - something with the browse speed on my PC I expect.
Looking at Page 52 of the V2 manual it is of course broken down as you pointed out.