Hi,
Kudos for actually reading the datasheet!

Your CONFIG looks allright for selecting the internal oscillator.

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However, for the osccon and osctune I have the following doubts…

OSCCON bits 1-0:
What is the difference between 1x=Internal oscillator block and 00=Primary oscillator?
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Look at figure 3-8 in the datasheet. There they show the primary oscillator as the one interfaced to OSC1/OSC2 pins of the PIC. Then again, in the text they say that "The primary oscillators include the external crystal and resonator modes, the external RC modes, the external clock modes and the internal oscillator block".

OSCCON bit 2:
INTOSC frequency is stable or not stable…should I set this to 0?
No. This is a read-only bit indicating if the frequency is stable or not.
If you look above the bit definition in the datasheet you'll see something like [R/W-1] or [ R-0 ]. The first means that bit is Read/Write and its default value is '1'. The second means that it's a read-only bit and its default value is 0.

OSCCON bit 3:
Should I set to 0 or 1?
Same as above. Status bit for you to read (if you need to) but you can't write to it.

OSCTUNE bit 7:
What is the difference between the 2 options?
“1 = 31.25 kHz device clock derived from 8 MHz INTOSC source (divide-by-256 enabled)
0 = 31 kHz device clock derived directly from INTRC internal oscillator”
Again, look at figure 3-8. You can see that the 31kHz into the MUX can come from either the internal oscillator block OR from the (low power) RC oscillator.
If you want a real low power solution and run at 31kHz you'd do that by shutting down the power hungry (relatively speaking) internal 8MHz oscillator and tap of the 31kHz from the RC oscillator. If you're not going to run the PIC at 31kHz it doesn't matter.

Hope that helps.
/Henrik.