I dont use IDE 1.0.. I have v23 still..
but for a quick steps.. I did the following:
took my Arduino Duemilanove 2009 board...
*made sure correct COM port was selected..
*made sure I had board setting set to Arduino Duemilanove or Nano w/328
uploaded the Optiloader sketch to my Arduino.
(took my blank 328p chip/set-up...with crystals..caps..etc)
connected the following from my Arduino Due 2009 (that now has optiloader 'sketch' on it) to my blank 328p set-up
// 10: slave reset >> to blank chip RESET
// 11: MOSI >> to blank chip pin 11
// 12: MISO >> to blank chip pin 12
// 13: SCK >> to blank chip pin 13
// 5v+ to 5v+
// GND to GND
power it up.. it will auto detect the board/chip you have connected (if there is support for it).. and write the Optiloader 'bootloader' to the blank chip. (it will output a message on the serial monitor through the IDE if you want to read/check)
After optiloader 'bootloader' has been flashed to your blank chip/board...it is now ready to handle sketches being uploaded to it..
To do this.. you connect your newly flashed board to your computer..
open the IDE....
*make sure correct COM port was selected..
*make sure I had board setting set to "UNO"..
and upload your sketches..