The schematic for AVR ISP show in picture 1, IC1 DS275 use for RS 232 Driver becuase it small and no need external component IC2 AT90S2313 is the CPU to communication and receive command from PC that run AVR Prog to control target CPU.
This firmware compiled to run on crystal 4MHz ,so the target device must connect crystal 4MHz on XTAL1 and XTAL2 pin.But, if your target device use internal oscillator and enabled .its not need any external oscillator
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To use this AVR ISP with target device that run at 8MHz you can do this by recompile the firmware source code.
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