Arduino Duemilanove as ISP for ATMEGA8

Hello!

I was browsing quantity of blogposts and topics on this forum, yet I still cannot solve my problem. So if anyone can help me with some advice, I would be very happy.

I have one ATMEGA8L-8PU chip I'd like to burn an arduino bootloader on.
I have set it up according to this scheme:

I used 8Mhz crystal and 22pF caps.

According to many advices around I have disabled the autoreset by putting a 120ohm resistor between +5V and reset.
I've successfully uploaded the ArduinoISP sketch to the Duemilanove board and I saw the 'heartbeat' on the 9th pin. So the ISP was working.
Than I've selected 'Arduino NG or older w/ ATMEGA8' option from board menu and tried to burn the bootloader.
This is where the problem starts. I see RX and TX diodes flashing (2x cca for 1 second) and than I receive an error "avrdude: stk500_recv(): programmer is not responding".

Thank you very much, any help will be appreciated.

Just found out that the same procedure works under Windows XP without any problem.

What operating system did it fail on for you?

Mac OS X 10.7.3

yes this method works with windows 7.. First of a thing that didn't work on Linux for me!