This pull-up resistor makes sure that reset does not go low unintended. The pull-up resistor can in theory be of any size, but if the Atmel®AVR® should beprogrammed from e.g. STK500/AVRISP the pull-up should not be so strong that the programmer cannot activate RESET by draw the RESET line low. The recommendedpull-up resistor is 4.7k? or larger when using STK500 for programming. For debugWIRE to function properly, the pull-up must not be smaller than 10k?.
also take out that 1uf cap and just wire resets together (ya I know its there for a reason, but its a debug point)
cross your RX and TX lines, leave the cap out of it
However if you follow the tutorial you link to, they are linking the reset pins together without a capacitor, and removing the ATMega from the Arduino - this is so the Arduino effectively becomes a USB converter which passes the signals through from the PC and there's no processor on board to respond to the reset so that signal goes direct to your target. So either method will work, but I expect not both Next the pull-up resistor value from the target to +5V I should think is a little low. In contrast to your 46R, normally I'd use something like a 10k there.