To get this chip working with Arduino IDE, you will need an external 16MHz crystal or resonator, a 5V supply, and a serial connection.
The only bit that I'm having a time with, Larry, is when you said, "I compiled your electricEelWheel.pde sketch, it was 2,748 bytes. The 168 has 16 Kbytes and the 328 has 32 Kbytes".
Finally, Osgeld suggests the USBASP, while Larry recommends a Arduino UNO (could you point me to something that looks like you mean, there are a number of things that come up when I search for that). Do these two approaches accomplish the same thing? Does one have an advantage over the other?