O.K... Try this,

Start:
b0 = 0
IF PortB.1 = 1 THEN
b0 = 1
ENDIF
SEROUT PortB.0, N2400, [b0]
PAUSE 10
GOTO Start

Now, it looks like you are using Stamp type conventions for labels. b0 is not very descriptive.

button1 var portc.0

This will alias the above port pin (can be any pin) so you can use a more descriptive term and it will be easier to follow the program in the future. Also, "Let" is unnecessary with PBP. It will still work,and if it is habit, then do it. Do you have the apropriate pullup(down) resistors for your switches?