AVR ISP Help

Hello,

I am trying to get a parallel port ISP dongle working, but am having some
trouble.  The dongle I made is the one given at:
http://www.iready.org/projects/uinternet/ispdongle.pdf.  By looking at the
avrdude.conf file I believe this to be the pony-stk200 programmer.

I am trying to program an ATmega8 with the following commandline: avrdude -p
m8 -c pony-stk200 -y -e -i blink.hex

AVRdude reports that it has erased the chip and programmed the flash, but
when it verifies the write it failes on the first byte (0x0000).  For this I
gather the flash is not actually being programmed at all.

My question:

Do I connect the RST line from the dongle directly to pin 1 of the ATmega8?
Do I need any other circuitry on pin 1 (i.e. diode, resistor?).

The ATmega8 is brand new.  Should it work with AVRdude?  My understanding is
that it should come configured to use the internal oscillator so I do not
need an external crystal.  Is this correct?  The only connections I have to
the ATmega8 is the ones for the dongle and power.

Is there some way to simply verify the setup of the dongle.  For example,
when it reports that the flash is erased does it actually verify this (which
would indicate the setup is correct) or just assumed it was.

Any ideas, suggestions, comments would be much appreciated.

Thanks,
Donovan