You need to select Tools > Processor > ATmega328P (Old Bootloader).
Shame there is not notification of this change of behaviour
It would be advantageous to have a version history available for each board (and library).
If thats the case, I cant see why I cant bootload a nano selecting ATMega328 using Arduino and a AVR Dragon but can by using another nano as the ISP programmer.
On another note, when using Studio 7 and the AVR Dragon, the only selection for ATMega328 in the Arduino subdirectory is Optiboot, theres no ATmega328 and this wont work with this nano.