Interesting discussion. By coincidence I am looking into using exactly this technique to check/calibrate an OXCO regulated clock I am making. Indeed I stumbled on this thread whilst searching for information on how accurate the pps signals are on GPS modules generally.
@wwbrown: May I ask what GPS you are using. I have a GlobalSat EM-406a, but I can't find any specific information on the pps in the copy of the datasheet I have available. I am also looking at a Fastrax UP501 where the datasheet, somewhat blithely, simply states +/-50ns.
@PaulS: Thanks for the information on the accuracy of the micros function. Just out of interest is that documented anywhere? I'm guessing the best (only?) way of improving on that would be to use an assembler level timer ISR? (And keep in mind the accuracy of the system clock, of course.)