Oh well...1) When Avrdude says that it can't talk with a chip then its report of the device signature is totally bogus and should have not been reported at all.
2) The "-b" option description makes no sense. I was mistaken when I assumed that this controlled the ISP serial programming clock frequency. It doesn't. The documentation gives no hint at what this option is really for.
3) The "-B" option actually controls all the serial programming interfaces' clocks. The Avrdude documentation fails to simply state this also controls the ISP programming clock rate.
I finally reprogrammed the clock control fuse byte to use the internal 8 MHz RC clock with this command :
avrdude.exe -B 20 -p atmega16 -P USB -c usbtiny -U lfuse:w:0xE4:m
This whole ordeal has been very painful due to the sheer quantity of misinformation and bad advice given.
Many thanks to all that have contributed who know what they're talking about !
