For one of my applications I was going to write a Perl script that could update a group of ATmega168s. The Perl script when send a RESET string to the '168. A reset function would be called and the bootloader would start. Then the script would call avrdude to download the new firmware.
If you modify the bootloader you can do a software reset by letting the watchdog
timeout. You can do a hardware reset using one of the Arduino pins and a cap.
The bootloader modifications for software reset are n the "Software
Application" hint at http://tinyurl.com/5lnhtj
I haven't had a chance to finish this yet. Being able to update a group of devices
to the same firmware seemed like it would be useful.
(* jcl *)