Thanks for those diagrams of the voltage regulator. I'm still getting 2 different stories about the capacitor sizes though, I had copied and pasted from the reference and it said a 10uf and 1uf, and "retrolefty" mentions a big and small cap, but "pluggy" said he read in the reference somewhere that its 2 10uf ones, I've also heard other sources seemingly using 2 identical ones. Does it work both ways, or is one method better?
Also, voltage regulator aside, does the schematic I posted above look all correct and problem free?
As far as the issue "selby96" mentioned about programming it. Well I plan to just program it with a duemilanove board, and then take it out and put it in its permanent spot in its own circuit. The purpose of me making the minimum standalone is for permanent installation. I do all the prototyping on the duemilanove board, but once a project is done and needs no more changes, I'd like to just pop the chip out, install it permanently to the project, and pop a fresh atmega328 with bootloader into the duemilanove and move to the next project.