The reset pull-up is supposed to be 10K not 100 ohms. Try that first.
I think the OP is defeating the auto-reset on the Duemilanove board with the low ohm resistor to temporarily disable the auto-reset on the 'programmer' board running the arduinoISP sketch. That's per most instructions, no?
Actually I've used my Duemilanove maybe a dozen times as the arduinoISP programmer and never once had to defeat the auto-reset function, but I understand it's a timing thing and is not always effected by the auto-reset process.