Thanks to both of you for your helpful replies.
Of course, V1.01 and later is needed for the 32U4 or Leonardo, I was aware.
I also use the WINAVR Programmers Notepad to program the 32U4, 2560, and 328P that I have - using the same programmer.
Using a small piece of code as a test - just to light a LED on a particular PORT - changed the PORTing to prove the code took with each avr chip.
No problems at all..the same programmer was used, proving a bug exists in the Arduino IDE.
I need to produce a commercial solution for programming chips in the lab and field on the fly, if and as necessary - once this embedded project is done there will be thousands of chips to program and verify, so there is a need for a tidy solution.
Nick, your website is great and was very interesting.
So it seems that the newer Arduino versions including the Wiring IDE do not pay attention to hardware compatibility with programmers such as the Usbtiny.
If it is a hit and miss as it seems to be then you are right - these programmers will gather dust if anyone tries to use them with these new IDE's.
I started using Arduino as it seemed to be a reasonably quick entry into an embedded solution - my project is commercial - but I now see many shortcomings with Arduino and a distinct hobby approach, which in essence,it is.
To further evaluate my prospects I recently attended an Atmel Tech on Tour workshop in Sydney - there were about 25 people there - we all wanted to learn more about using Atmel Studio6 using the XMega-A3BU Xplained board and JTagIce3.
Very interesting day and we all learned a lot about the software and hardware.
It was obvious that getting your head around Studio6 was on another level - and the reason most mortals use the simple Arduino system - well at least when it works!
However if Arduino refuse to fix known bugs then eventually many, will by necessity move away from that platform.
Nick, can you contact me - directly, not via this forum.