Do you mean to say that
Q1 this statements should be copied into the code or the .inc file??
Q2 and both works fine with mpasm??

This way;

__CONFIG _CONFIG1H, _OSCS_OFF_1H & _XT_OSC_1H
__CONFIG _CONFIG2H, _WDT_ON_2H & _WDTPS_128_2H
__CONFIG _CONFIG4L, _LVP_OFF_4L

Should now look like this;

CONFIG OSCS=OFF,OSC=XT,WDT=ON,WDTPS=128,LVP=OFF