PWM resolution in pic 16F877

Here I'm using pic 16f877 MCU and mikroc for pic compiler to understand PWM signals.
The data sheet says that this MCU is having a 10 bit resolution in PWM. I cant understand what this resolution means. Does it mean that if I use it to power a motor I can get 1024 different speeds.
Here is a program I wrote in mikroc to gradully increase the light of a LED and again decrease it.

int i=0;

void blink_up(){
  i++;
  PWM1_Set_Duty(i);
  Delay_ms(10);
}

void blink_down(){
  i--;
  PWM1_Set_Duty(i);
  Delay_ms(10);
}


void main() {
  trisc=0;
  portc=0;

  PWM1_Init(5000); //initilize PWM 1 at 5kHz
  PWM1_Start();
  PWM1_Set_Duty(i);

 while(1){
    while(i != 1023){
     blink_up();
    }

    while(i!=0) {
     blink_down();
  }

}

But this wont give the expected results. The LED gradully bilnks up and suddenly switch off and again gradually blinks up. But when I change the line while(i != 1023) to while(i != 255) it gives the expected results.

So I want to know what the 10 bit resolution means, did I understand it wrong or am I doing anything wrong.

please help....

At last I got the solution. I'll give it because it may be helpful to somebody else.

The mikroc's pwm library don't support 10 bits. So PWM1_Set_Duty() accepts only a number from 0 to 255. That's 0% duty to 100% duty cycle. If you want to use 10 bit resolution you should do it manually writing for registers.