I am trying to make a universal remote from the atmega chip and I connected the power pins and added the crystal and capacitors and it wouldn't work until I removed the capacitors. And even then it would only work for about 10 seconds running a simple blink sketch and the light would slowly dim until it stopped working. Any solutions or advice? Thanks in advance.
How about a schematic and/or photograph of the circuit. Chances of you having something wrong there are higher than any thing else so without seeing the circuit there isn't much place for us to start.
How did you load the bootloader? (Do you have a bootloader?) How did you set the fuses to select the external crystal instead of the internal oscillator?
Post schematic, and/or pictures of the board.
Obviously, something is wrong with the design - but it could be anything at this point 
dustyloshe:
I am trying to make a universal remote from the atmega chip and I connected the power pins and added the crystal and capacitors and it wouldn't work until I removed the capacitors.
That sounds like the usual description of using the wrong capacitors or trying to build it on a solderless breadboard.
Paul__B:
That sounds like the usual description of using the wrong capacitors or trying to build it on a solderless breadboard.
this my initial thought as well...
(wrong sized caps)
Did you follow this ?
What are you using to communicate with the chip ?
Slow fading of the LED implies inadequate power.
Checklist:
Adequate power - measure the supply voltage under load - it should not droop sag or change under load.
Series resistor for LED - mandatory
Decoupling capacitors on Vcc/AVcc - mandatory
Each power and ground pin connected - mandatory
AVcc connected to the same voltage as Vcc (within 0.3V) - mandatory