Use the HPWM command. Can't write the code for you, but one way is to use a counter and slowly ramp the duty cycle up and then down. Play with the pause times to get the effect you want. It will look better with 10bit PWM, try this first. Also search MBAM on the forum this works good for leds.

Code:
Duty var byte
Main:

For Duty = 0 to 255 ' Gets brighter
pause 100
HPWM 1, Duty, 1000
Next Duty

For Duty = 254 to 0 step -1 'Gets dimmer
pause 100
HPWM 1, Duty, 1000
Next Duty
Goto Main