arduino duemilanove 328 programming atmega168 ?

I have got the new arduino duemilanove that has the atmega328. Now i want to make a standalone arduino which can be programmed by the duemilanove. The atmega168s are easily available here but the 328 is not. So, would the 168 work with my duemilanove. If so, can i change the arduino328 on my arduino with a atmega168. Please help.

The ATmega168 (with Arduino bootloader) will work in place of the ATmega328P in your Duemilanove.

Select the board: "Arduino Duemilanove or Nano w/ ATmega328" when you use the 328 or "Arduino Diecimila, Duemilanove, or Nano w/ ATmega168" wen you use the 168