Thanks for the reply. Does seem wacky! So what I need to do is:

1. Make a backup copy of your PBPPIC18.LIB.
2. Now use an editor to find & replace all instances of OSC with XTAL.
3. Save the .LIB file, and compile with DEFINE XTAL 48, and the new config directives in your code.

So for my need for 32 mHz, I should change my define statement to:
DEFINE XTAL 32 instead of DEFINE OSC 32

Do I also need to remove the config stuff and put it back in the .inc file?
Thanks, again.