Hi,
I'd probably handle the discrete fault signal (type 1) thru an external interrupt (PortB.0) as it will give you a fast response time. If you find that tricky and/or the response time to that input isn't very important you can simpl poll an input each time thru the main loop and stop whatever needs stopping.

As for the overcurrent (I'm guessing that's what it's for) you could possibly use the onboard comparator (look at the datasheet, section 13). It too can generate an interrupt when its output flips or you can simply poll the output directly or the interrupt flag if you want a "latching" signal.

/Henrik.