Help Needed- USB to Serial Interface- Arduino pins

I have standalone boarduino with Atmega 328P installed. The board has no USB interface. I recently purchased 300bps~3Mbps USB Adapter for Arduino from deal extreme website:

Now their are 6 pinout from that device: VBUS/TXD/RXD/GND/3.3V/DTR

The Boarduino is supplying +5V to Atmega 328P chip thru voltage regulator 7805.
My Question are:
1- can i upload the sketches on my standalone boarduino with the above device?
2- Should I use Tx/Rx/Gnd and DTR of that device only ? What is VBUS and 3.3V? when VBUS and 3.3V is required?

Following is i am thinking to connect the boarduino with above USB device:

a) Connect Atmega 328, Pin1 (Reset) connected with USB device DTR with 0.01uF ceramic capacitor.
b) Connect Atmega 328, Digital pin 0 with USB device Tx pin
c) Connect Atmega 328,Digital Pin 1 with USB device Rx Pin
d) Connect Atmega 328, GND with the USB device GND

Please help.

Vbus is the raw 5V USB power
3.3 is a regulated output from vBus
DTR I think should have a 100 nF cap (.1 not .01) as the Uno R3 uses that value from the 16U DTR line to the '328 reset pin... probable a good idea to copy it.
and add a required 100k resistor from DTR to ground (provides a discharge path for the cap)
The rest are connected correctly as near as I can see.


Hi Doc,
Thank You very much for helping me and providing the valuable feedback about the resistors/capacitors. I shall soon make the modification in the PCB and post here.
Again thank you.

Here i implemented the ICP scheme in my solar tracker module.