Atmega168 bootloader internal 8Mhz

Did the bootloader end up on it OK?

Can you run this sketch and report what you get?

Wiring for a breadboard:

Arduino Uno         Target Atmega328

D10 (SS)            Reset (pin 1)
D11 (MOSI)          Pin 17
D12 (MISO)          Pin 18
D13 (SCK)           Pin 19

Gnd                 Gnd (pins 8 and 22)
+5V                 +5V (pins 7 and 20)