Right I DID get the 1284p up and running but other than flashing the LED I have had a few issues. On day 1 I had followed some instructions and was using the reset prior to uploading a sketch and it worked. I then went to bed and forgot and the reset button spending 2 days trying to get it to work again. The current position is as follows.....
The chip (either 664p or 1284p) programs via ICSP (AVR studio v5 & AVR ISP Mk2) perfectly every time.
Arduino IDE will upload a TINY sketch 3 out of 5 times using either an FTDI cable or using RX/TX off a 328p board
The 664p/1284p will barely run the sketch ie in a tiny sketch it communicates with the IDE via serial.
The 664p/1284p can set a few pins high or low but then nothing seems to happen.....
So basically the boot loader appears to work ok. The LED flashes to show the bootloader is working.
The program appears to run.
When programming the 664p/1284p via the IDE I get some issues.
When uploading THIS program :
void setup() {
Serial.begin(9600);
Serial.println("setup");
}
void loop()
{
PORTB |= B01010101;
Serial.println("Port B = B01010101");
delay(500);
PORTB |= B10101010;
Serial.println("Port B = B10101010");
delay(500);
}
The 664p/1284p communicates and prints the "Port A = B01010101" message followed by "Port A = B01010101" over and over BUT the port values DO NOT CHANGE!
This is the stream from AVRDUDE when it is programmed:
http://www.cowasaki.co.uk/Arduino/AVRDUDE1.txtRight now IF I increase the program even slightly this is what happens:
http://www.cowasaki.co.uk/Arduino/AVRDUDE2.txtAVRDUDE fails with an error saying that it can no longer communicate with the programmer ie:
avrdude: ser_recv(): programmer is not responding
avrdude: stk500_recv(): programmer is not responding
and it always fails at the same location or similar.......
I have been speaking with Jim 'Skywalker' and we both feel that there may be a hardware issue so this is the schematic:

Can anyone see any issues with the schematic (I have purposefully done the schematic in a literal manner with every wire and component shown as is. This is to highlight any problems!
Thank you to anyone who may help.
Once it is working I will update the thread I started and create a batch file to update the IDE on the Mac and Windows (if anyone can help me with the Linux version then thanks)