I have a standalone atmega328 on a breadoard with the bootloader for Duemilanove. For programming, I use a USB to TTL converter bought on eBay for less than 4 $, shipping included.:
It was working perfectly but I had to press manually the reset button of the atmega in order to upload the sketch. Reading this page http://www.arduino.cc/playground/Learning/AutoResetRetrofit I saw that autoreset needs a 0,1µF capacitor between DTR signal and Pin0 (reset Pin) of the atmega.
According to the datasheet of CP2102, DTR corresponds to the Pin 28.
I then soldered a capacitor between Pin28 and R2 which is connected to the RST Pin of the adapter:
It was not easy and I had to work under the microscope.
So, yesterday I discovered that there is probably another solution.
When seaching eBay for “USB to TTL”, you will come across another layout of adapter, still with CP2102 chip:
As you can see, there is a hole already connected to DTR where you can solder a pin or a wire. This hole can be connected to the reset pin of the atmega through a 0,1 µF capacitor.