OK all fixed now and working ....well almost :-)
This line was causing my problem
LCDINIT LcdCurBlink

so just took it out ! See the working code below ;-)
Now there just one problem to sort out ... the "hello world' message writes itself on one long string and then repeats without anyspaces on the first and second lines ....
something like this
Hello||World||Hello||World||Hello||World||Hello||W orld||Hello||World||Hello||World||
How do I format it to something like
Hello
World
?


Code:
'*************************************
'LCD code for 16 X 2  HD4x lcd
'*************************************

'Ocsillator selections here
OSCCON = $70            'Int CLK 8MHz
OSCTUNE.6 = 1           'PLL 4x
ADCON1= %00001111       '$0F = disable A/D converter
'END of oscillator selections


'Port IO directions and presets for port pins begin here
TRISA = %00000000       'All pins are outputs
TRISB = %00000000           
TRISC = %00000000           
TRISD = %00000000
TRISE.0 = 0
TRISE.1 = 0
TRISE.2 = 0
'End of Port IO directions and presets for port pins begin here

'timer/oscillator defines 
DEFINE OSC 32            '4x 8MHz
'END of timer/oscillator defines

'LCD defines begin here   
DEFINE LCD_BITS 4 	'defines the number of data interface lines (4 or 8) 
DEFINE LCD_DREG PORTD 	'defines the port where data lines are connected to
DEFINE LCD_DBIT 4 	'defines the position of data lines for 4-bit interface (0 or 4)
DEFINE LCD_RSREG PORTD 	'defines the port where RS line is connected to
DEFINE LCD_RSBIT 2 	'defines the pin where RS line is connected to 
DEFINE LCD_EREG PORTD 	'defines the port where E line is connected to 
DEFINE LCD_EBIT 3 	'defines the pin where E line is connected 
DEFINE LCD_RWREG 0 	'defines the port where R/W line is connected to (set to 0 if not used)
DEFINE LCD_RWBIT 0 	'defines the pin where R/W line is connected to (set to 0 if not used)
DEFINE LCD_COMMANDUS 2000 	'defines the delay after LCDOUT statement 
DEFINE LCD_DATAUS 200 		'delay in micro seconds
'END of LCD DEFINES


   Pause 500       ' Wait for LCD to startup

loop1:   
   Lcdout $fe, 1   ' Clear LCD screen
   Lcdout "Hello"  ' Display Hello
   Pause 500       ' Wait .5 second

   Lcdout $fe, 1   ' Clear LCD screen
   Lcdout "World"
   Pause 500       ' Wait .5 second

   Goto loop1       ' Do it forever