Code:
DEFINE OSC 20
INCLUDE "modedefs.bas"

DEFINE LCD_DREG     PORTC
DEFINE LCD_DBIT     0
DEFINE LCD_RSREG    PORTD
DEFINE LCD_RSBIT    1
DEFINE LCD_EREG     PORTD
DEFINE LCD_EBIT     3
DEFINE LCD_RWREG    PORTD
DEFINE LCD_RWBIT    2
DEFINE LCD_BITS     8
DEFINE LCD_LINES    4
Define LCD_CHARS    20
DEFINE LCD_COMMANDUS    2000
DEFINE LCD_DATAUS   50

VTXD VAR PORTB.0 
VRXD VAR PORTB.1 
Flowin VAR PORTB.2 

        Pause 500       

	Lcdout $fe,$C0, " Please Insert Your "
        Lcdout $fe,$94,	 "    Flash Drive        " 
        Pause 100    

RESP	 VAR	 BYTE[16]

X1	VAR	BYTE
X2	VAR	BYTE
X3	VAR	BYTE
X4	VAR	BYTE
X5	VAR	BYTE
X6	VAR	BYTE
X7	VAR	BYTE
X8	VAR	BYTE

checkvin:

SEROUT2 VRXD,8588,["ECS",13]
HIGH VRXD
PAUSEUS 10
SEROUT2 VRXD,8588,["IPA",13]
HIGH VRXD
PAUSEUS 10

WAIT1
IF Flowin = 1 THEN WAIT1
SEROUT2 VRXD,8588,["DIR",13]
PAUSE 100
SERIN2 VTXD,8588,[STR RESP\8]

X1 = RESP[0]
X2 = RESP[1]
X3 = RESP[2]
X4 = RESP[3]
X5 = RESP[4]
X6 = RESP[5]
X7 = RESP[6]
X8 = RESP[7]
X9 = RESP[8]
X10 = RESP[9]
X11 = RESP[10]
X12 = RESP[11]

PAUSE 100
LCDOUT $FE,1,X1,X2,X3,X4,X5,X6,X7,X8,X9,X10,X11,X12
PAUSE 2000
As you can see I ripped a part of your code. pardon me for doing so. I just wanna see if the vdip would respond to the pic. This program is pretty short, I just wanted to display the first file it detects to the lcd. I wouldn't want to write a long program and then start wondering what part of the code went wrong after wards. Once I get a response even just one file name from the directory then will start to write my own program including the file browsing.