Can not load program.

I am using the following: USBtinyISP
Atmel 328
Arduino 0022

I have setup my 328 chip as an Arduino on a breadboard and can bootload via the USBtinyISP. Next, I try to load from File>Example>ArduinoISP. (I want to load a smaller program on to an ATTiny85 chip.) On the USBtinyISP the Green LED lights but, no Red LED indicating data transfer. Bootloader performed RESET function and loaded automatically but, no other programs i.e. Blink, etc., will do this. I have tried to manually press RESET at various times and no success. I changed to NEW unused 328 chips 3 times and still get same the responses. Any ideas? - Mike

Why do you need arduinoisp if you have an usbtiny?

That doesn't make sense to me.

Keep in mind I am a Newbie to the Arduino world. From the various items I had seen instructions given were to use the USBtiny to load ArduinoISP to the 328 chip then, down load the program of choice thru the 328 chip using the ArduinoISP to load the ATTiny85. I also thought that the USBtinyISP could load to the ATTiny85 directly but no success.

I just downloaded/installed Arduino 1 and got the error msg "avrdude: usbdev_open(): did not find any USB deice "usb" " Another thought comes to mind now that the 328 has bootloader on it. Would the 328 chip accept ArduinoISP via parrallel port connections? In regard to the USB issue, any thoughts on getting it recognized?