breadboard atmega 328 oscilator not working, Why???

It should work with all AVR chips that support ISP programming, which is most of the ATtiny chips and the ATmega chips. I don't know about the ATxmega ones and AVR32 chips. If you're shooting for those, better get the 35$ one from Atmel.

With my usbtiny I've been successful in programming these chips so far:

ATmega168, ATmega64, ATtiny24, ATtiny2313, ATtiny4313, ATmega32, ATtiny13