Hi,
You seem to be approcahing the project in all the correct ways, what you describe is most certainly doable and I honestly can't see why the output would swing between the extreme ends like you explain, especially with a gain of only $0100.

Can you replace the feedback voltage with another pot? Then, with a gain of $0100, you should be able to adjust the output with EITHER the setpoint pot or the feedback pot. Dissconnect the motor and just observe the output untill you get that working. I'd also try to get the variables output etiher to a LCD like you say or over a serial line to the PC.

One thing I do see though is that you have the pid_Out_Clamp set to 511 but as you say the HPWM command only accepts a dutycycle of 8 bits (0-255) so I'd set the pid_Out_Clamp variable to 255. You could always try copying pid_Out to a BYTE-sized variable and use that varaible in the HPWM statement but I don't think that is the real problem.

Hang in there!

/Henrik.