As the title suggests, can I use an ATmega 328 with the Arduino bootloader just strait in the breadboard? So I can make use of the Arduino tools and sketches?
Yes
I did it with a:
DT006 from Dontronics (old as the hills)
CP-AVR V4 from ETT
and several other boards and chips
If you add a small cap from the RS232 driver to your reset button you can have autodownload too!
Tim