Yes, the Frequency parameter can be negative (in a table-lookup oscillator, that just means to increment backwards through the wavetable).
To do audio rate frequency modulation, you probably want a center frequency ± (modulator * max deviation). When you see a combination of a shift and a scale, it suggests that ScaleAndOffset might be a good choice for the Sound to be pasted into the Frequency field of an Oscillator for audio-rate frequency modulation (delete the 'L' that is automatically pasted after the Sound so that it will be evaluated at the sample rate and not at the control rate).
When you select "Frequency" as the Modulation type for an Oscillator, it actually does Phase modulation. (The classic DX7 algorithm for FM is also phase modulation, not frequency modulation). Modulation Index (MI) is unitless, but you can think of it in terms of radians; in other words, if you set MaxMI to
Double pi * 2
a maximum amplitude modulator will shift the phase by 2 pi at its maximum displacement.
There's an example called "Compare Frequency modulation to Phase modulation" in
Kyma/Kyma Sound Library/Synthesis/Synthesis-VCS control/Oscillators.kym
that compares phase modulation to frequency modulation.
If you want to do frequency modulation in pitch space (which is what a lot of voltage-controlled analog synths do) try the Sounds called
'FM in pitch space w/ slow Modulator' and
'analog style FM in pitch space'
in that same file. They convert the linear frequency of the modulator into log space.
You can use the same techniques on the AntialiasedOscillator (and in any other parameter field that has a biege background, indicating that it can accept an audio-rate Sound input). The anti-aliasing cannot protect against the distortion products of frequency and phase modulation though, since FM and PM generate a theoretically infinite number of sidebands (most at very low amplitude).