I'm trying to build this Ambient lighting for PC (original link; updated link). This worked flawlessly on my Arduino Uno. My next step was to make it using "Arduino on a breadboard". So I bought a blank ATmega328 chip and burned the Arduino bootloader (for the board "Arduino Duemilanove w/ ATmega328") onto it using the Arduino IDE and USBasp; and I know this has been loaded properly as this ATmega chip works fine on the Uno.
Then I made the USB-to-serial converter using FT232RL ; but its drivers didn't install on my PC (Windows 7 x64). I suspect I overheated the surface-mount FTDI chip and killed it while hand-soldering it.
So, I've kept it aside, and got USB-to-serial converter bridge (front; back): (Sorry for the poor pictures) I used an additional ST232CN on my breadboard, to convert the voltage levels from RS232 to TTL, as shown in this page. And this works fine, as I verified from a loopback test. And I've connected pin 9 of ST232 to pin 2 of ATmega, and pin 10 to pin 3.
When I tried to upload a blink example from Arduino IDE, I get this error:
Binary sketch size: 1026 bytes (of a 30720 byte maximum)
avrdude: stk500_getsync(): not in sync: resp=0x00
When I do the verbose upload (Shift+Upload), I get this error/message:
avrdude: usbdev_open(): did not find any USB device "usb"
Also, I tried adding 1k pull-up resistors at pins 2 and 3 of ATmega, but didn't help. So I guess the problem now is in the serial communication from the ST232 to ATmega? And is there any special connection to the Reset pin of ATmega? I've pulled it up to 5V with a 10k resistor.