Programming Atmega8-16PU error (not in sync)

Got some cheap Atmega8-16PUs cheap along with a USB to serial dongle for programming the chips. The configuration passed the loopback test.

I connected it like so: RESET - 1 - DTR RXD - 2 - RXD TXD - 3 - TXD VCC - 7 - VBUS GND - 8 - GND

I selected the correct COM port, Arduino NG (Atmega8), AVR ISP. But when I try to burn the bootloader or upload a sketch the error: "avrdude: stk500_getsync(): not in syn: resp=0x00".

Help please?

You can't burn the bootloader with a USB-to-Serial connection. You need an ISP device. If you have an Arduino you can use the ArduinoISP sketch as your ISP device. You will need the 16 MHz crystal (and load caps) or 16 MHz resonator connected to your chip before you can burn the bootloader.