I've definitely used it successfully in the past. The giveio software was originally intended for use with PIC, but all it does is provide access to the parallel port, so it's also usable for AVRs. Some people have apparently had to use Arduino 0007 to burn the bootloader with a parallel programmer, though: http://www.arduino.cc/cgi-bin/yabb2/YaBB.pl?num=1193364533.