This question is posted here as a reference question (its actually a follows on from comments in my earlier question "How to expand program memory on an arduino?") -( Edgar Bonet suggested this question and who answered 1 below in the comments there).
I think its a useful question to others new to arduino. I have posted an answer too. But you can of course add your answer too. I dont know everything about arduino- still learning. It does not refer to the version of the Uno that uses a surface mount atmega328-but the version with removable atmega328.
1) If I take out the atmega 328 chip from its socket on the Uno and replace it with using atmega8-16PU instead and I burn a bootloader-does that mean I can use the arduino Uno with the atmega8 like the atmaga328 (but with a subset of the features of the 328)? The atmega8 is of course an older chip than the 328 (and is significantly cheaper) but it still has same pinouts.
2). I am using the 16mhz crystal in my project. So using an Arduino Uno with atmeg8 chip does this mean that the bootloader will set the fuses on the arduino's atmega8 to use the crystal on the arduino Uno pcb? Or does the bootloader set the fuses on the arduino's atmega8 to use its internal oscillator?
3) So hw much memory is left after writing bootlader to atmega8 ?
4) Can I burn the bootloader more than once?