in your pbp dir you have a file called 16f886.inc


edit it to look like this below
remove all config statements from your pgm

failing that upgrade to pbp3 it makes life much easier
silver edition is only $25 at dontronics if the have any left


;************************************************* ***************
;* 16F886.INC *
;* *
;* By : Leonard Zerman, Jeff Schmoyer *
;* Notice : Copyright (c) 2009 microEngineering Labs, Inc. *
;* All Rights Reserved *
;* Date : 07/02/09 *
;* Version : 2.60 *
;* Notes : *
;************************************************* ***************
NOLIST
ifdef PM_USED
LIST
include 'M16F88x.INC' ; PM header
device pic16F886, intrc_osc_noclkout, wdt_on, mclr_on, lvp_off, protect_off
XALL
NOLIST
else
LIST
LIST p = 16F886, r = dec, w = -302
INCLUDE "P16F886.INC" ; MPASM Header
__config _CONFIG1, _HS_OSC & _WDT_ON & _MCLRE_OFF & _LVP_OFF & _CP_OFF
NOLIST
endif
LIST