Thanx to maniacbug and all other members for putting this great thread thorough..
I had to try for some 2 days to get it to bootload my Atmega1284p Finally it worked... phew!!!
Tip for others using Arduino 1.0 I couldnt get it to bootload without this though.
Note for Arduino 1.0: you need to make one small change to the ArduinoISP code. Find the line in the heartbeat() function that says "delay(40);" and change it to "delay(20);"
Did someone edit the wiki page of AVR ISP today? because I was pretty sure I didnt find it yesterday(Or probably didnt notice). Today I made the change and Voila it worked... (Dont know why though...
Sorry @Crossroads for the late reply. couldnt buy your PCB. I needed a complete assembled board. and I found a dealer in India selling similar boards (Not bootloaded to work with arduino though) http://www.ebay.in/itm/ATMEL-ATMEGA1284P-PCB-ATMEGA644P-ATMEGA32-ATMEGA16-components-/140621576563?pt=LH_DefaultDomain_203&hash=item20bdb2f973
(See attachment for schematics of the board)
So far so good. but the problem starts now. I cant burn programs into it. I used maniacbugs blog to burn the bootloader and it worked fine. Now I am trying to burn blinky program into it but I dont have FTDI breakout boards though to program it. I am trying to program it directly with a Serial cable as shown below.(No interfacing ICs used though. I am guessing the board has RS232 interface from schematics though.)
I am connecting only the pins Rx,Tx, RTS and GND pins of DB9 connector to the board. Is this enough to get it to program the Atmega1284p? (Apparently I cant. seem to be getting avrdude: stk500_getsync(): not in sync: resp=0x00 errors ). Is DTR pin required? because I saw a mention of that in maniacbug's blog. Any help regarding how to upload programs directly via serial cable?