Yes, use DEFINE OSC 8 just like you always should.
But if you change PicOSC, it will change all parts of PWPS including the 50Hz pulse frequency.

If you only want to change the resolution, you can modify one line in the .inc file ...

; W1 = TicksPeruSx100 * Position ; original line
W1 = TicksPeruSx100 * Position / 2

Then instead of 0-900, the position variable will be 0 - 1800

1uS resolution (0.1 degrees) was already better than the maximum performance of hobby servo motors.
A resolution of 0.5uS will not have any affect if that's what you are doing.