Use GOSUB VS GOTO if the routine you're going to uses RETURN to get back.

Disable onboard comparators with CMCON=7 before trying to use a pin that
has the comparator feature.

Give this a shot;
Code:
@ __config _INTOSC_OSC_NOCLKOUT &_WDT_ON &_PWRTE_ON &_MCLRE_OFF &_BODEN_ON &_CP_OFF &_DATA_CP_OFF &_MCLRE_OFF


servo1 var Porta.0
x var byte
CMCON=7 ' <-- disable analog comparators

    low servo1
    HIGH PORTB.3
	
loop:	
    pause 500
    low portb.3
    pause 500
    high portb.3
    GOSUB move   ' <-- use GOSUB VS GOTO
    pause 2000
    low portb.3
    GOTO loop

move:
    for x = 200 to 100 STEP -1 ' 2mS to 1mS pulse
      pulsout servo1,x
      pause 18
    next x
    pause 2000
  		
    for x = 100 to 200 ' 1mS to 2mS pulse
      pulsout servo1,x
      pause 18
    next x
    pause 2000
    return
  		
   END
This should cycle your servo from one side to the other. Tested with a
Parallax servo.