Ok, so now that I'm thinking about it, is the ATmega168 going to be running the Arduino bootloader (and thus be reprogrammable by other Arduino users) or will it have its own "OS"?
It will be a Arduino but the reprogramming feature will be optional.
Basically the EEPROM will store a whole pile of settings.
One of the settings will be if you want the bootloader turned on or not. 
I should get the PCBs early next week hopefully.