bluetooth should provide a virtual com port on your computer. this virtual com port must be selected in the arduino development software to communicate with the board and upload compiled code.
if you want, of course you can also use an ICSP programmer that supports the atmega168 and directly write hex files to it.
after upload the arduino can run on its own, just with a battery if you want.
if you're thinking about in system debugging (JTAG), then no the atmega168 microcontroller doesn't support that. so debugging will be in your head mostly