You don't seem to be using the 16 individual readings for anything else, so you can simplify it to:

    unsigned int SR;        // Sample end result value
    unsigned char size;     // ADC conversion variable
    
    
    Wait(1); //16X sampling of incoming data from potentiometer
    SR=AD1DAT2;
    Wait(1); //Wait 10ms for next sample   
    SR=AD1DAT2;
    Wait(1);    
    SR+=AD1DAT2;
    Wait(1);    
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);
    SR+=AD1DAT2;
    Wait(1);

    SR = (SR / 16);                                             
    size = SR;          // Local SR = Sampled result average

Of course, rather than manually code 16 individual reads of the ADC, and 16 individual calls to Wait(), you could put it all int o a loop...