I tried using your instructions, but couldn't make it work. I also tried other variations / permutations:
- connecting the Vcc
- connecting Gnd to Reset on the Uno,
but, but all no luck.
Have you tested on Uno yet? On the tutorials page http://arduino.cc/en/Tutorial/ArduinoToBreadboard
there was a note that: "Note that these techniques only work with the Arduino Duemilanove w/ an ATmega328, not the Arduino Uno (or older Arduino boards w/ an ATmega168)." . So it appears that the different boards have quite a different make up.