How did I miss this?
Looks great hayleia! Keep it up!

Impressive !

Did you ever see Jim E's pokémon demo? It was very similar in style to yours, smoothscrolling but aligned to a grid (only his was 16x16, not 8x8). He had a quick way of filling in/shifting the screen. I'm not sure how you handle it, but in asm it's pretty easy just to shift the whole screen one (or two) pixels to the left shifting in the missing pixels from a buffer with the last shift of the row of pixels. I guess with grayscale you'll have to do it for two buffers, but it's still much quicker than redrawing the map. That way you can also have a very optimised map routine since your sprites will all be aligned, you can just ldir (copy) them directly without needing to use any special sprite routine to handle shifting, etc.

Why don't you just slow down vertical scrolling with a quick Copy( or Pause so that you don't have to sacrifice graphics quality on the horizontal shifts?