Here’s a functioning ATmega168 on a JeeNode v1 PCB:
It needs just a 10 KΩ resistor, a 100 nF capacitor, and a wire jumper. The IC socket is optional :)
The jumper replaces the voltage regulator. If you later add the RFM12B module, use an FTDI interface which supplies 3.3V to this configuration, not 5V.
To make this work from the Arduino IDE, choose “Lilypad Arduino” as board – it’s set up to run off the internal 8 MHz RC clock. Then burn the corresponding bootloader to the chip (I use a USBtinyISP). Once that is done, you can upload and try out sketches.
This setup requires the modified “avrdude” software which is part of the Arduino-0013 IDE (version “5.4-arduino”). See this comment for why and how it confused me.
Update – All gcc/avrdude issues have been resolved in the Arduino-0014 IDE.