Just found ProgISP which is recommended by some of the China Taobao shops for use with this programmer and it seems to be working. I am able to read the flash and the fuse values match the values given by Nick Gammon's detector sketch.
From the Board Detector sketch:
LFuse = FF
HFuse = DA
EFuse = FD
From ProgISP
Based on the above. Do I have the clock set as internal 8Mhz and the clock divide by 8 set?
If this is correct then I am not sure about what is happening. I previous burnt the Duemilanove boot loader by using the Arduino IDE. I assumed this would set the clock at 16Mhz and clear the clock divide flag. Did these get reset when I uploaded later sketches?
If the chip is running at 8 Mhz will it ignore an attached 16Mhz crystal?
Sorry if these are basic questions. I am just starting to explore the Atmega chip as a standalone device and while I am enjoying the process I am finding some of it hard going.