eriknyquist:
johnwasser- That's an interesting idea, could you elaborate any more on that? doesn't a counter just take a clock input, and have a single output? how could I control a mux with that?
He meant that you could program the ATMega8 to act like a mux. It's just like adding another Arduino to your project to take over the mux duties.
An ATMega8 is just an older style of ATMega328. Same number of pins but less memory and a bit cheaper -- well, actually the ATMega328 is a bit cheaper if you buy it from domestic sources (Digikey/Mouser/Newark/etc.).
See: http://arduino.cc/en/Tutorial/ArduinoISP or The Null Nibble: Using Atmel ATMega8 as a barebones minimal Arduino clone or http://hlt.media.mit.edu/?p=1695