thanks for the fast reply! Most of the AVR-ISP's I found looked much more expensive than buidling the parallelprogrammer so I think I'll take that route. My (first of many) question is will the ICSP pins on the USB board still work with the 168? If not, can I just put it on a bread board and wire it up to the correct pins myself? Hopefully that's it. Thanks again!
Ya, I have the same problem. I tried burning the bootloader to a 168 with the microcontroller option set to 8 and it just returned a bunch of errors (no surprise). Do I need a new hex file or something?