Can't help with ISIS, I've never used it but your schematic will not work. You must at least make these changes:
1. add current limiting resisors in each segment connection of both displays.
2. add decoupling capacitors across the all the supply pins
3. add clock components, the 877a does not have an internal clock generator
4. tie /MCLR high, preferably through a resistor.
Also you may have to debounce the switch contacts, either in hardware or software.
The software would be far smaller and easier to maintain if you put the segment values into an array, for example "digit_1[10] = {0x10,0x40,0x79...};" so you could set the displayed digit by using something like "digit_1[2]; digit_2[3];" to show "23". It also makes the calculation of which digit to display much simpler. You are also missing code to actually time the seconds, it looks as though you intend to use timer interrupts but the ISR is missing.
Brian.