Polling is when when you continuously read a register to see if a flag has been set. I do not have any experience with the HC908, so I am not sure if this is going to help you.
All you need to do is write a value into the Timer0 register that corresponds to how long it is going to take for it to overflow. I am assuming that it is a 16bit timer, and you are running a 4Mhz crystal. So, it would take 65535uS for Timer0 to overflow, and generate a timer overflow interrupt. Since we only want to interrupt every 50us, you have to load 65485 into Timer0. Then, just switch the output on or off as required.
I have no idea where these registers are located on the HC908, so I cannot offer any assembly to help you out. If none of the above makes sense to you, I suggest you talk to your instructor, because this assignment seems a little difficult to complete given how little information you were given.