The easiest thing you could try is a little software filtering. Read the analog value 8 times in a row ( without delaying between reads) adding the value into a single variable and after the 8 additions, divide by 8 and print out the results, then reset the variable and start another 8 reads, add, divide, display, reset, lather, rinse, repeat. See if that helps or not. On the hardware side one might consider a op-amp buffer to isolate the rather high impedance value of the thermistor from the input impedance of the A/D circuitry in the AVR chip if the software averaging is not effective.
Lefty