Uploading "blink" to external ATMEGA386P-AU with Arduino Uno R3 (beginner, getting started help)

Really now? Then you are probably the only one who can use an Arduino Uno WITHOUT this capacitor as an ICSP programmer, or anyone else who follows the TESTED PROCEDURES and builds this capacitor because it simply doesn't work without it, are doing something fundamentally wrong.
Without a capacitor, the UNO does a reset and goes into flash mode itself, which means that it writes the sketch, which should actually be written in the target system, in its own bottle memory, provided it is intended for an Atmega328. The only way to prevent this (without the capacitor) would be to disconnect the RESET line to the USB chip on the Uno after uploading the Aurduino ISP Sketch, so that no reset is possible via USB.