What software do you use ? "Pickit 2 programmer" or MPLAB IDE ? ..with the later I dont know if the manual settings overrides the settings in the source, I use the Pickit2 software.

I just tried your code, compiled it with

C:\PBP>pbpw -p16f877a blinkit.bas

and loaded the hexfile into the pic with the pickit2 software.

The pic only had a 20MHz xtal between pin 13 and 14, two 22pf caps from both pins to ground and a 10k pullup on ~MCLR, a 470ohm resistor from pin 17 to a LED wich is connectet to ground in the other end. exactly your setup as far as I can see.

And yes, it works here.