With a 8Mhz internal clock (which translates to a 2Mhz timer clock), if you set timer 0 with a no scalers, the variable TMR0 will increment every 0.5uS, and overflow every 128uS.

For a frequency of 30720Hz you want TMR0 to overflow every 32.552083uS which translates to 65.104167 increments of 0.5uS.

So if you preload TMR0 with the value 191, it will increment 65 times every time before overflowing, giving you a frequency of 30.769kHz (or equiv. of 120.19Hz PWM).