Hey KK
There is something you can use to view the variables durring debugging. After you compile and download a program to the NXT and while the debug is on, go to robot/Debugger Windows in the upper menu. There is a list of debugger tools that become available only while the debugger is running. These tools will let you view data being poled directly from the NXT. If you select Global Variables, it will have a window with all the variabled declared in your program. You can also change variables values from this window while the NXT is running. There are also tools that emulate the NXT display and read the motor encoder values
Here you go, enjoy B-)
Scott