Plop your bootloaded part on a breadboard with 16MHx xtal, two 22pf caps, 10K reset pullup resistor.
Get an FTDI Basic (or equivalent), wire up the Atmega Vcc, Gnd, Rx, Tx, and Reset to the FTDI Vcc, Gnd, Tx, Rx and DTR pins.
Tell the IDE you have a 16 MHz 5V Duemilanova, should be ready to go!
I think there are playground examples that discuss just this.
There are other options as well - such as using the FTDI on your existing Arduino to do the same (if so equipped).
Thanks much. There seem to be multiple choices of FTDI devices on the Sparkfun site alone and it's not clear (to me at least) which one to get. Can you confirm that this is the correct type of device? http://www.sparkfun.com/products/9716