I've bootloaded my atmega328P with the "atmega328 on a Breadboard (8MHz internal clock)" bootloader but when i try to upload a sketch I get the error:
Did you use the IDE to burn the bootloader or did you do it through the command-line?
On a semi related note, does PWM work the same at 8MHz?
No. It runs at half the frequency. For most applications, you will not notice a difference.
I wanted to skip the external crystal because Im makeing a very simple fading LED device but obviously I may have to re-think it if PWM isn't effective at 8MHz.
For fading LEDs, you will not notice a difference.
ALSO the program isn't terribly time sensitive so accuracy isn't an issue, but does my sketch have to be changed to account for the clock speed change
So long as the entry in "boards.txt" is correct, you only need to build your Sketch.