to install optiboot, you need an AVR ISP. Go to the project/optiboot and compile it using make. change the fuse to boot to the bootloader after a reset :

      avrdude -c usbasp -p atmega168 -V -U efuse:w:0x04:m

upload the bootloader using make load. It will erase all the flash space.

plug in power and serial link. make an external reset by short circuit pin 3 and 6 of the isp connector. LED1 will blink 3 times. Then you have 8 seconds to upload your code. Use this command :

      avrdude -c arduino -P /dev/ttyUSB0 -p atmega168 -b 38400 (-V)

You can use make sload to load your code in the bugOne, if you already have the bootloader enable.

• you can only read or write flash memory. No fuses or eeprom
• you can modify eeprom using a project whose sole purpose is to write a value to eeprom
• you can't change the bootloader using the bootloader. You have to use an isp