I've got PicoBlazes running in a handful of designs. Rather than using the Xilinx-provided assembler, I use the pBlazIDE. (I hate how he says, "this tool is in beta, and probably always will be. Puh-Leeze.) I like it because it has a handy simulator. NB that for whatever reason, the guy who wrote pBlazIDE doesn't use the exact same opcodes used by the Xilinx assembler.

Also, the way Ken Chapman wrote the PicoBlaze and its templates throws up a shitload of VHDL compiler warnings. He uses both attribute INIT strings and generic maps, and versions of XST since at least 7.1i properly use generic maps to set INIT attributes, so the attribute strings are not necessary.

(Plus for some reason he has the boilerplate "use IEEE.STD_LOGIC.ARITH" and "use IEEE.STD_LOGIC_UNSIGNED" clauses, referencing libraries which a) have been deprecated and b) aren't even used in the design.)

-a