atMega8L -- any external components required at all?

Is there any need for any external components (e.g., caps) at all in this setup?

You don't have to have them. But it is better to have them.

A problem easily rectified with tuning.

It actually requires far more than that. RC oscillators suffer a few issues: temperature drift, accuracy and jitter. Accuracy at a given temperature is easy to deal with. Jitter for long-time horizon applications can be dealt with. Temperature drift is difficult to resolve. fungus is right on target on this one.