You should add a diode across the 10K resistor, [edit] Anode Cathode to power and Cathode Anode to Reset, will keep the chip from attempting to go into High Voltage programming mode
Atmel AVR042 AVR Hardware Design Considerations
Section 3.
I've not found the cap to ground to be needed. Likely the DTR cap makes it stable enough.
Also put a 100nF cap from Aref to Gnd, will be needed for stability if one is doing any analog measurements.