There may be several things going on here. Let's see if we can fix a couple of them.

First, since PBP wasn't installed in the default folder, you have to change the path to one of the files.
In your c:\mcsp\pbp247\ folder, there is a PBPUSB18.LIB file.
Open it with notepad, and change the first include line to...

  include "c:\mcsp\pbp247\PBPPIC18.LIB"
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Next, edit the c:\mcsp\pbp247\18F2550.INC file with notepad.
Comment out ALL of the __CONFIG lines with a semicolan ;
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Then in the USBdemo program, change _FCMEN_OFF_1H to _FCMEM_OFF_1H

That will need to be changed again after the next time you upgrade MPASM.
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Those should fix several of the errors.
Compile it like that and let me know whats left.
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