In your case the "pot" signal would be the US Sensors signal. The result of the PID controller would be the steering signal. If the whole system is tuned correclty, the steering would be much more smooth.

You do not have to mess with the speed of the car at this point. May be later if all are working as expected.

As for the HPWM, why not use the DT-INTs with a 20ms timer to have it within specs? With 4MHz clock and TMR1 you can produce an interrupt every 20ms (50Hz) and then update the value to PWM module.

Ioannis