Jumper is correct, need to see how you have it hooked up. As for the code, looks "OK", but if I remember this device needs the OSCON reg set also. If someone does not clarify this I will when I get back to the shop.

In the mean time look at these.
http://www.picbasic.co.uk/forum/showthread.php?t=543
http://www.picbasic.co.uk/forum/showthread.php?t=551