Just so nobody gets the wrong idea...I'm not being a royal a$$ here....

In your program...(and again, not being an a$$, just trying to get you to understand what's what here)
Code:
Button var PORTB.0		' Push button
LED1 var PORTB.1                           ' Led 1
LED2 var PORB.2                             ' Led 2 

Pushed	var	byte		' Variable will contain the byte

	If PUSHED =1 Then	             ' If button is push
		High LED1	' Turn on the LED
IF PUSHED=0 Then
           High LED2	
endif
You have 'If Pushed = 1'...Pushed is a variable...Where is 'Pushed' being set to anything, at least anything that is going to be useful to you?