You should (and probably want to) stay away from the old "Arduino NG and older" option. It was originally made for boards without auto reset, so there's a 10 second delay from hitting reset until you program starts. The bootloader is significantly larger than Optiboot, and there aren't a lot of space.
All very true IF the Op intends on using a bootloader. For device with such scant resources, I would use ISP.
Ray