PaulS:
I'm not going to tell you not to use RSSI. What I am going to do is ask you WHY you want to use RSSI? It is a piss-poor, rough-order-of-magnitude, indicator of distance.
Right, to answer your question. I want to measure distance of a moving object in a big field with no obstructions/interference whatsoever. The accuracy can be +- 1.5m. Even if this doesn't work, I would still like to know how to get RSSI from PWM, or rather, why I get no PWM from my XBee's..