I have a need to program an separate gps device using an application on PC over serial/ftdi, can I use the mega 2560 as a ftdi breakout board rather than buying a separate one? I tried a search buy couldn't find anything.
You could try grounding the Reset pin on the header, and connecting to the Rx & Tx pins at the D0/D1 header, connect to Gnd also, using the ATmege16U2 as the USB/Serial adapter for your GPS device.
Is there a way I can just use the arduino as a usb to serial converter with the arduino
As CrossRoads says:
Connect a jumperwire from reset to ground.
Just to be sure nothing bad happens to your Arduino you should first upload
an empty sketch to the UNO, and connect a 220 ohms resistor between The Uno and target device
Alternatively you can remove the Atmega from your Arduino
The FTDI board you referenced is a really good product and a very nice price. I don't know the exact exchange rate but the part is under $3.00 US, a very good price and the solution to a lot of potential issues.