Hi there,
For most of my debugging, I use the PIC-Simulator from OSHONSOFT.
I can track variables and/or any other info I need, emulate an LCD display, set port states and AD values and lots more.
Most of the time, I don't even have to build a proto on the breadboard and it is really time-saving.
IMHO, it is worth the few € it costs and can be an alternative to "hardware" debugging tools.
http://www.oshonsoft.com/pic.html
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