So I cannot play around with timer0 from the arduino ide?
Well, you can change the timing and PWM (capture/compare) values and stuff like that, but you can't provide your own interrupt service routine.
apart from that the rest will work? and given i change it to timer1 or timer2?
I didn't actually try it; I just fiddled till it compiled. But I don't see any reason that it shouldn't work.
Note that it operates fundamentally differently than blink.pde
It might be interesting to have a whole series of "blink" sketches, all of which do the same thing in different ways...