FTDI breakout board

I blew up my first Arduino a few months back and bought a FTDI break out board from sparkfun. I have it wired up and can now program the Arduino again. One issue I am concerned with is that the Arduinos FTDI chip is getting very hot. This chip is fried and I no longer use it (oviously). Should I be scared of this?

Also, in order to program the board I need to hit reset on the Arduino once the code has been compiled. I have tried hooking up the DTR pin on the breakout board to the Arduino reset pin but this didn't work. Should I just stick with manually resetting once the code is compiled?

Try DTR via a 0.1µF capacitor to the reset pin.

One issue I am concerned with is that the Arduinos FTDI chip is getting very hot. This chip is fried and I no longer use it (oviously).

Anything that gets hot is drawing power. You might try cutting the trace or lifting the pin on the FTDIs 5v line. Probably safer to have to be unpowered.