Hi!
I created a small example on how to use interrupts with Arduino, find it here:
http://gonium.net/md/2006/12/20/handling-external-interrupts-with-arduino/
It shows how to install an interrupt handler for external interrupts with the ATMega8 and the AVR-GCC libraries. The principle should be the same for other interrupts like e.g. timer interrupts.
-Mathias