I built one for a friend and had a hell of time getting my firmware on it. I finally found an option that worked, but I honestly cannot remember which route I took. Although, I do remember that trying to load it with Atmel Flip and that screwed a lot of stuff up. Please don't try to use Flip on this board, as it will cause headaches
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When you load firmware and it doesn't "take," it is most likely that there is an error, making it incompatible.
There is a file in the same folder as the firmware flashing .bat that will erase the chip, do that for starters.
I ended up using easyAVR (yes, but do NOT us Flip to push it ) to generate the firmware file that I dragged onto the .bat and that worked the first time. The trouble is that you don't get quite as many options as the default firmware for LEDs.