OK. Sorry. You're probably right, but give this a shot just for the heck of it.;o}

1. Edit your 18F4525.INC file in your PBP directory. Change this line;
__CONFIG _CONFIG1H, _OSC_XT_1H

to this; __CONFIG _CONFIG1H, _OSC_INTIO67_1H

Save the file.

Note this line: __CONFIG _CONFIG3H, _PBADEN_OFF_3H saves you from having to
manually disable A/D for several PORTB pins. Just FYI.

2. Change your code to something like this;

Code:
DEFINE OSC 8

'******Setting up the LCD display******
DEFINE LCD_DREG PORTB
DEFINE LCD_DBIT 4
DEFINE LCD_RSREG PORTB
DEFINE LCD_RSBIT 0
DEFINE LCD_EREG PORTB
DEFINE LCD_EBIT 1
DEFINE LCD_BITS 4
DEFINE LCD_LINES 2
DEFINE LCD_COMMANDUS 2000
DEFINE LCD_DATAUS 50

'@_CONFIG_CONFIG1H_OSC_INTIO67_1H ; this does nothing & it is not a command

TRISB=0 'Set Port B as output
OSCCON = %01110010

a VAR BYTE

Loop:
  LCDOUT $FE,1,"PIC - LCD Test "
  PAUSE 1000  
  FOR a = 0 TO 255
   LCDOUT $FE, $C0," A = ", #a
   PAUSE 1000
  NEXT a
  GOTO Loop
  
  END
Does it work now?