It may not be the most structured of codes, but this also demonstrates the IF...Then...Else option

Code:
@ __CONFIG _INTRC_OSC_NOCLKOUT & _WDT_ON & _PWRTE_ON & _MCLRE_OFF & _BODEN_ON

ANSEL=0                 
CMCON=7                 
TRISIO = %101010

LED    var GPIO.0

main:
IF GPIO.1=0 THEN
goto flash
ELSE
LED=0
ENDIF
goto main:

Flash:
LED=1
If GPIO.1=1 then main:
pause 100
LED=0
pause 100
goto flash:
I think your original problem was in setting the PIC up as digital and turning off the analogue functions, hence the ANSEL and CMCON settings

Wow... I'm only a newbie and I've managed to pass on some advice... maybe my status should change from newbie to novice