Custom arduino

I made an Arduino on a prototyping board. I connected a led and resistor to output 13.

The problem is as follows:
the prototype works great with an atmega8 (the led blinks every second) but once I use an atmega168 nothing works anymore: sometimes the led blinks too quickly and erraticly, sometimes it just never turns on.

What can the problem be? Why could it work with an atmega8 and not an atmega168?

I am using the following clock source:

Oups, my bad. Seems I had badly burned set the fuse settings.