I just assembled my target board and usbtinyisp and got the blinking led! I can even change the delay and watch it blink at different speeds!
Now I want to make the same LED pulse, just like the 'Fading' example on the Arduino IDE. It's on port [PB5/SCK] (does that support PWM?) of the blank atmega328p that came with the kit. I didnt find any code for LEDs to fade, even though I think it should be "easy" to do. Where can I find it ? Does anyone have that code already ? That would be nice Thank you
PS: I don't have a crystal (it's working with the 1mhz internal)

>I want to make the same LED pulse, just like the 'Fading' example on the Arduino IDE.

I'm not sure what example this is, but you can use the USBtinyISP as the programmer with Arduino, if you want to go that way.

> It's on port [PB5/SCK] (does that support PWM?)

It does not do hardware PWM, but you can still do software PWM. Execute a loop, where the LED output is high part of the time.

Hum... ok, I understood how coding and uploading to the Atmega328 works but programming for it is a bit too much for me. It seems way harder then the Arduino, so I thought of burning the bootloader to the '328 and use it as an Arduino.
The problem is after burning the bootloader, I have to upload code to it using the Arduino IDE.
I have another Arduino, can i upload code from one to another using ISCP pins ?

Thank you

Hum... ok, I understood how coding and uploading to the Atmega328 works but programming for it is a bit too much for me. It seems way harder then the Arduino, so I thought of burning the bootloader to the '328 and use it as an Arduino.
The problem is after burning the bootloader, I have to upload code to it using the Arduino IDE.
I have another Arduino, can i upload code from one to another using ISCP pins ?

Yes you can, but if you have a USBtinyISP, then it's much faster and easier to just use that for your programming.