Strange serial output on breadboarded Arduino

Hello!

Not sure if I posted this in the right spot, but I have been having some odd issues with my breadboarded Arduino. I purchased an Atmega328 with optiboot pre-programmed on it, and I built an arduino on a breadboard by following one of the many online tutorials. (16mhz crystal with loading caps are also in place) I then connected the breadboard to an FTDI breakout (It is wired correctly) and uploaded the following code via a Pocket AVR Programmer:

/*
 * Hello World!
 *
 * This is the Hello World! for Arduino. 
 * It shows how to send data to the computer
 */


void setup()                    // run once, when the sketch starts
{
  Serial.begin(9600);           // set up Serial library at 9600 bps
}

void loop()                       // run over and over again
{
  Serial.println("Hello world!");  // prints hello with ending line break
  delay(100);
}

I plug in my FTDI board by USB, and the RX light begins to flicker like it should. So I assume that "Hello World" is being sent.
Or at least, it should have.

I open up the serial monitor in the Arduino IDE, and I notice that whenever the RX light blinks, the horizontal scroll bar on the monitor gradually shrinks, indicating that characters are being received. The problem is, I can't SEE any of the characters. It's blank. (Like it is only receiving spaces) This happens on other computers too, so I am not really sure what I have done wrong. The terminal is set to 9600, and the port in windows is also set to 9600.

Anyone have an idea why this would be happening?

-BB

What are the fuse settings? You can run this sketch:

You might have the "divide by 8" fuse bit set.

Try setting the serial monitor to 1200 baud. That is 9600 / 8. That would at least prove or disprove my theory.