The rails are broken in the middle. The top rails are not being used at all. I am using the bottom rails to power the chip. The unregulated + power comes in at the right side and is wired to the 5V Regulator. From the regulator the 5V + is wired to the bottom + rail. The bottom + rail is then wired to 10K Resistor to pin 1 and pin2. Then to pin 7 and pin 20 (for avcc). For Negative - the rail is wired to the power source. And to pin 8 and pin 22. Notice the power led I added on the left. It is lit. I'm sorry but grateful that you are taking so much time to help me. I am skeptical of the fuse settings. Has anyone successfully run the ATmega8 off the board?