Yes, you may need a lowpass filter to generate a stable DC voltage, but it's a commonly used technique (to allow contrast adjustments via the processor).
Personally I've never tried it, I'll be interested to hear how you get on, particularly if you need a filter or not. I'm sure you'll be able to find something about it on the net, maybe even in the MicroChip application notes somewhere?.
100% is 100% PWM and 0% is 0% PWM, so actually it should say 'PWM' instead of 'Contrast'
I did some experimenting. Used a 330ohm and 10µF as a lowpass filter. It showed some distortion on higher PWMs. After increasing the capacitor to 100µF the distortion dissapeared. So a capacitor between 10µ and 100µ would be optimal.
100% is 100% PWM and 0% is 0% PWM, so actually it should say 'PWM' instead of 'Contrast'
I did some experimenting. Used a 330ohm and 10µF as a lowpass filter. It showed some distortion on higher PWMs. After increasing the capacitor to 100µF the distortion dissapeared. So a capacitor between 10µ and 100µ would be optimal.