yes, it'll be to drive the microcontroller (a pic16f690). The clock is a binary clock (each digit displayed in binary) with 13 leds and 2 push buttons.
I tried using the internal clock but it's way off and from what I understand, the internal clock depends on voltage, temperature, ... anyway.
The oscillator contains an amplifier/transistor. The crystal provides a feedback path to make the amplifier/transistor scream at a set frequency.
Your pic16f690 has this amplifier built in and the datasheet specifies the types of crystals and caps you should use.
I only made that suggestion because 18pF looks close to what has always worked for me. On any pic I have had good luck with 15 or 20 pF caps, and I never go through all the calculations, etc, which you find in the PIC data sheets. 36pF seemed a little high, but it will probably work too.