Build without Bootloader Questions

I have a board that I have designed and I am able to successfully build and load an image using the USBtiny programmer. I added an entry in boards.txt for my board specifying the programmer and that works fine.

How does the boot process work in this case ? How does it know to boot directly to my code instead of vectoring to bootloader on reset ?
Also how do I set the fuses in this case ? Again I am assuming that the bootloader. directives in boards.txt are ignored ? The reason I ask is that it appears the CPU is running at 128KHz (ATmega168 internal slow clock) which is governed by the fuse settings. How do I control the fuse settings in my case ?

It almost seems that there are some additional directives to be added to boards.txt when you build to run without a bootloader. Another funny is that after the build is complete it still says 14K is max available instead 16K (which is what I expect without bootloader)

Thanks,
Steve