hi bill,
I have used the LM35 and LM135 with a PIC16F877 and a +2.50 Vref device.
Worked ok, its at lowest recommended Vref of +2.5V. You must leave at least 2.5V between the -Vref and +Vref.
As you can see from the LM35 datasheet the Vout/degC is only 10mV/Cdeg.
So over the basic +0C to +100C its only 100*.01= 1V which with a Vref of +5V gives an ADC value of (1/5) *1023 = #205
The Vref +2.5V increases the ADC slope, so you get an ADC value of #410, so the resolution around 0.25Cdeg.
If your required temperature is 0 to 100C, then I have found its better to have a non-invert opa *5,
leave the Vref [internal] at +5v and you get a resolution of around 0.1Cdeg.
The advantage of the LM35 is that is Centigrade and the LM135 is Kelvin.
Hope this is useful.