Thanks for your response. will you kindly explain the steps...
I have already viewed the pages but they either use an arduino board or a boot-loader preloaded atmega chip. so they are of no help to me. 
http://tutorial.cytron.com.my/2011/09/30/how-to-program-arduino-by-using-avr-usbasp-programmer/
I have a fresh atmega8 chip (I can get an atmega328 if needed), usbasp, arduino software1.0.3 & a will to learn the arduino language.