er yeah that was me... Thanks condemned/nigel/keith/whichever brother you are! 
I meant to document all of this back in the summer but never got round to it...
I was using the hacked version of avrdude supplied with Luminet version of Arduino IDE, which has/had bitbang-based .hex file programming built-in. LumiNet: An organic illumination network - Media Computing Group - RWTH Aachen University
I use a mac and at the time (this might still be true) there was an issue with the Mac FTDI driver, since it uses VCP and avrdude doesn't like this. (thanks to René Bohne for help with this!)
From what I can gather looking at the scant documentation I made, I ended up resorting to running windows under parallels, and using the windows version of the avrdude distributed with Luminet like this:
C:\luminet\Windows\hardware\tools\avr\bin> avrdudeFTDI -C ../etc/avrdudeFTDI.conf -v -v -v -v -pm168 -cdiecimila -Pft0 -B4800 -e -Uefuse:w:0x01:m -Uhfuse:w:0xdf:m -Ulfuse:w:0xff:m
C:\luminet\Windows\hardware\tools\avr\bin> avrdudeFTDI -C ../etc/avrdudeFTDI.conf -v -v -v -v -pm168 -cdiecimila -Pft0 -B4800 -e -U flash:w:TellyMate_M168.hex
The first one sets the fuses, while the second one burns the hex file. I got the fuse values from the batch file M168_program_all.bat on the batsocks website. I guess you can do something similar for non-168 based arduinos.
In terms of wiring I used the common hack at http://www.geocities.jp/arduino_diecimila/bootloader/index_en.html including soldering a 4-way header onto the board.
caveat: this info is now a whole 5 months old and so could be hideously outdated by now...
cheers,
pixelfrenzy/mungbean/chris