OK, if you are running your PIC at 4MHz, then the timer will run at 1MHz, which means that TMR1L will increment every 1uS (when the prescale is set to 1:1).

timing the command PAUSEUS 1 will not give you a result of 1 becuase of 2 reasons. First, PAUSEUS has a minimum pause time and 1uS is so fast that the time it takes to check the timer value comes into play.

Try this:

temp VAR word

TMR1H=0 ' Reset timer value
TMR1L=0
T1CON.0=1 ' Start the timer
PAUSEUS 1000 ' Pause 1000uS
T1CON.0=0 ' Stop the timer
temp.HighByte=TMR1H
temp.LowByte=TMR1L
LCDOUT $FE,$80,"TMR1 = ", dec temp

The LCD should display somewhere around 1000 - Probably a little more because of the time it takes to start and stop the timer.