168 Bootloader Error

Yes, the fuse settings are the same for 16 or 20 MHz - only the boot loader is different. Your CKSEL and SUT are the same as mine. And yes, the fuses are quite different for ATMega 8 and 168, and there is the extended fuse on the 168.

This stuff was very confusing to me but I finally got it working. I'm glad to help any way I can.

Now I'm dreaming of Arduino on the 324, 644 and 128 - wouldn't that be fine?

D.