1. If I want to develop some small product on smaller foot-print-chip, can I use my Uno ? How ?
Well you could pull out the ATmega328 and place it on your own smaller pcb and program it through the Uno board http://arduino.cc/en/Tutorial/ArduinoISP
2. As I percept, the ATMEGA328P on the Uno board is having a boot loader. Can I duplicate this chip? How?
Burn the bootloader onto another ATmega328 using your Uno as an ISP! http://arduino.cc/en/Tutorial/ArduinoToBreadboard
I have heard you can't do this with the Uno but it works for me.
3. I have not understood the menu of Tools-->BurnBootloader correctly in context with Uno. Can someone explain?
If you want to burn a bootloader onto an AVR microcontroller the Arduino IDE provides you with a few options to do that. That is what is under the Tools >> Burn Bootloader menu. You can burn a bootloader onto a microcontroller using those options. You don not have to worry about this for your Uno as it already has a bootloader. If you wanted to burn a bootloader onto a blank chip you could upload the ArduinoISP sketch, which is in the examples on the Arduino IDE, to your Uno and use it as and ISP to burn the bootloader onto the blank chip.
I hope this helps! If you have anymore questions post back!
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