Thanks, I figured it out. I did it in AVR Studio without all the DFU mode sequences, I just erased the chip and inserted the combined .hex. It would be nice to do it through the usb port but since I am already using AVR Studio to bootload the Atmega328, its just another connection.
The reason I dont use an UNO is seen in the pic. My Uno is about the size of a nano to fit in a specific location for standalone use. When I need a display, it fits onto a motherboard that has switches, inputs and a LCD stacked on top.
Can you tell, I dont like wires? :-)