I'll throw in my 2 cents.
Not sure what you mean here:
I have both sketches running at the same time on the same ATmega328
As for how to combine the two sketches, I can see the people counter sketch reads an analog value and sends it to the PC, plus it turns on or off a led, while the display part just display current millis()/1000.
IMHO you have to add two things: a counter variable and a "previous state" variable. In rough pseudocode:
if (analogRead() > threshold) then
currState = HIGH
else
currState = LOW
endif
if currState != prevState and currState == LOW then // LOW or HIGH depending on the circuit
counter++
prevState = currState
endif
Finally, pass the counter value to the displayNumber function.
You might have to decouple the timing of analogRead() from that of displayNumber(). For this, have a look at blink without delay example.