Alternative to clock crystal.

Osgeld:
oscillators are 3 pin packages, what you discribe is a capacitor

Yup, three pins in a row, usually poking out of a yellow or blue blob. Rat Shack may still carry them, if so, use a 16MHz one for easiest compatibility with existing Arduino board configurations. Also have a look at the RBBB arduino from modern devices, it's as bare as it gets.