how to interface 2 [16x2 jhd 162a] lcd screens with one atmega 8 board

Using Arduino Displays
2

It's easier than that, you only need seven I/O pins for the two LCDs.
Look here for all the details: http://www.arduino.cc/cgi-bin/yabb2/YaBB.pl?num=1265969050

Also:
Why are you using serial.begin() ?
What is the purpose of your loop() ?
What do you expect to see on a two line display when you set the cursor to the third line with a statement like

lcd1.setCursor(2,2);

?

Don