Got it, so this is just like the ISP circuits used in programming PIC chips, super useful. Not asking for programming tutorial, I know it's like the fish and fishing pole story.
So before I even get started I still need some sort of programmer to get the code on there. So I will need something like
USBtinyISP
USBtinyISP - Inexpensive USB AVR Programmer
or even simple parallel programmer?
Arduino - ParallelProgrammer
So just out of curiosity, what would be an example of what you could do with those extra pins?