Emco PC turn 55 upgrade..

At 25uS it's only 20000steps/s and 200000 at 2.5uS.

Not sure if you are using steppers or servos. I tested my Mesa 7i76e with a NEMA 23 stepper until it could go no faster.
My steppers maxed out at about 700 rpm and using 25x Microstepping, I could get about 90 kHz
I then backed off to 20x stepping. I then moved the step length back to 1500 and had no loss of performance but I never tested to see if I could increase the step rate. So from what you are saying, you are pushing the envelope to the max. The difference between 20x and 25x microsteps won't have any affect on machine accuracy as according to what I read, once you get past 16x microsteps, you don't get any appreciable change in accuracy.

"Theoretical" threw me off.

[TRAJ]
AXES = 3
COORDINATES = X Z
LINEAR_UNITS = mm
ANGULAR_UNITS = degree
CYCLE_TIME = 0.010
DEFAULT_VELOCITY = 2.50
MAX_VELOCITY = 25.00
NO_FORCE_HOMING = 1

[EMCIO]
EMCIO = io
CYCLE_TIME = 0.100
TOOL_TABLE = tool.tbl
TOOL_CHANGE_WITH_SPINDLE_ON = 1

#********************
# Axis X
#********************
[AXIS_0]
TYPE = LINEAR
HOME = 35.0
FERROR = .01
MIN_FERROR = .01
MAX_VELOCITY = 15.0
MAX_ACCELERATION = 750.0
# The values below should be 25% larger than MAX_VELOCITY and MAX_ACCELERATION
# If using BACKLASH compensation STEPGEN_MAXACCEL should be 100% larger.
STEPGEN_MAXACCEL = 1500
STEPGEN_MAXVEL = 18
P = 2000.0
I = 0.0
D = 0.0
FF0 = 0.0
FF1 = 1.0
FF2 = 0.0
BIAS = 0.0
DEADBAND = 0.0
MAX_OUTPUT = 0.0
# these are in nanoseconds
DIRSETUP = 200
DIRHOLD = 200
STEPLEN = 2500
STEPSPACE = 2500
STEP_SCALE = 2000.0
BACKLASH = 0.016

I had not been considering the speed in TRAJ, which is set to 25mm/s(50,000steps/s). I was just reducing the speeds under the axis to 15mm/s(30,000steps/s).

Anyway I think I'm going to change the microstepping from 25 to 5.

I have the 6i25 with 7i76, and the original 3-phase steppers.

I am just trying to understand why I am getting following errors.

One reason is that you have the P term higher than /1 servo period
This means the PID control loop will be unstable (since it will over-correct)

You also have rather extreme acceleration relative to your velocity
( 0 to full speed in 20 ms! )

What do you mean higher than /1 servo period. The PID values are unchanged from pncconfig.

Since you have a 1/1000 second servo period, the maximum P value should be 1000
AFAIK the current pncconf sets this correctly, but in any case it should be fixed in your ini file