Can't communicate with ATMEGA328P-PU with FTDI BASIC

I breadboarded my ATMEGA328-PU with OPTIBOOT Arduino UNO Bootloader (form DIPMICRO) connected to a SPARKFUN FTDI BASIC
according to instruction I got here:

Circuit is running on 3.3V (per link above)
I have a scope and the 16Mhz xtal is oscillating (18pF caps per DIPMICRO) and the 328 comes up flashing pin 13 at 500mS rate.
RST is pulled up with a 10k resistor and CPU appears to reset nromally giving the standard sequence of blinks on D13
when I press RESET button (push button connected to ground via 100 ohm resistor.
I am using IDE 1.05 with Board = Arduino UNO and Programmer = AVRISP.
What am I doing wrong ?

“Programmer = AVRISP” = don’t care; FTDI is USB/Serial adapter, not a programmer.

You are trying to download a sketch?
Power, Rx, Tx, Gnd, DTR connected to Reset pin via 0.1uF cap?
If no cap, you need to press Reset when IDE shows “compiled xxx of 32xxx bytes”.
File:Preferences, click the Verbose Output boxes so you can see it occur easier.

Take the resistors off the Rx/Tx pins also.
Add 0.1uF caps to VCC/AVCC pins.
That picture you posted has incorrect cap values, you appear to have figured that out tho.

Do not connect Aref to VCC pin. Only a cap to Gnd. Aref connects to Vcc internally via a switch.

Removed the resistors on RX & TX.
Disconnected AREF from VCC.
Changed DTR cap from 1uF (picture used unit mF which I took to mean uF). to 0.1uF.
COMM working now (I can see it on scope) and Blink scketch works now !
Looks like I’m up and running … now I want to learn how to communicate with the UNO from my ATtiny85.
If you know any good links to implement serial comm /I2C/ or SPI on an ATtiny85 please let me know.
Thanks for your help !

Can't you just do Serial.begin() on both devices?
I've never used ATtiny85.

I get a compile error for any ‘Serial.xxxx()’ commands.
It seems like #include <SoftwareSerial.h> isn’t working.
I’m trying TinyWire library now to see if that works.