LED Newbie

I have Mac OS 10.4.3, IDE 0007, Arduino NG rev. C which I believe I have hooked up correctly (atmega168, FTDI drivers, etc.). I put an led between gnd and pin 13, connect usb to computer, green pwr comes on, then after a couple of seconds the led starts to blink (on and off about twice in 1 second). I hit the reset button, it goes off, then after a few seconds it starts to blink again.

I start up the IDE, open led_blink, compile fine, hit the reset button, upload program, all messages look good, tx & rx start to blink, and after a few seconds led13 starts to blink in the same manner as above.

I change the delay times in the program (on for 20000 ms, off for 100 ms). I recompile, reset, upload. Same blinking as above???

Any thoughts? Thanks