It looks like the breadboard where you're burning doesn't have a crystal, although that could be hidden behind something.
Burning the bootloader will also set the fuses... which will set it to require an external oscillator. You'll have to add an oscillator to the system to get it to talk to the ISP again.
Could that be your problem?
I just built the Arduino 1.0 core as a static library in Eclipse and using Windows 7. One thing you didn't mention is that you have to get pins_arduino.h from somewhere as well. For the Uno, which uses the ATMega328P, I believe, I think you want the "standard" variant.
- I copied into the static library project all of the files from:
hardware\arduino\cores\arduino
- I also copied into the static library project the pins_arduino.h file from:
hardware\arduino\variants\standard
Could it be you just got the wrong pins_arduino.h file for your target chip? Also are you sure you have the right chip and clock speed selected under Project Settings => AVR => Target Hardware?
I would delete your Arduino Core static library project, start over by downloading the Arduino 1.0 zip file from arduino.cc, and make a new project from scratch. I just redid the process a couple times to make sure there were no problems and it's pretty quick to apply the project settings once you've done it once (took me < 5 minutes the second time).
Edit
WProgram.h is deprecated in Arduino 1.0. It has been replaced by Arduino.h. Arduino libraries need to support both through #defines on the ARDUINO constant as described here. You need to define ARDUINO for the compiler as well in your main project, which you would do under Project Settings => AVR Compiler => Symbols and Project Settings => AVR C++ Compiler => Symbols respectively. You're going to want add a new Define Syms (-D) named ARDUINO with value 100 in both places I believe (ARDUINO=100).
Edit 2
I also had to explicitly include Arduino.h at the top of my blink.cpp source file (where setup and loop are defined), not sure how to do avoid compiler errors without it.
Edit 3
If you need to use Arduino Libraries, then you need to put the cpp and h files from the Arduino Library root folder into the arduinolib source folder, and any cpp and h files from the Arduino Library utility folder in an arduinolib/utility folder and include both arduinolib and arduinolib/utility in the project directory include paths (ala Project Settings => C/C++ Build => Settings => Tool Settings => AVR Compiler => Directories and Project Settings => C/C++ Build => Settings => Tool Settings => AVR C++ Compiler => Directories). You should only include those libraries in this folder that you actually use or the image will be bloated, presumably by way of each library's global variable declarations. A better way to go is probably to have separate static library projects for each Arduino library you want to use and place a project dependency on them from your main project, but that's a bit more work (could pay off in the long run though).
Best Answer
Assumption: The developed code mentioned in the question is not a very advanced and sophisticated application, and does not contain large amounts (10s of kilobytes) of data / arrays.
The Arduino code size limitations apply to the final compiled binary of the application, not the source code size, and not the size of the HEX file generated from the source code. As @DaveTweed has pointed out, Hex files will be more than twice the size of the actual binary bytes that need to be written into the MCU's Flash memory. Source code files will, further, be many times the Hex file size, depending on code specifics, commenting and coding style.
A 20-kilobyte binary output would typically represent a fairly sophisticated, complex application on an Arduino / LilyPad - or, an application incorporating a large amount of data arrays or data buffers. The source code for such an application could well be in the 100s of kilobytes!
Even the more complex of the sample applications that come with the Arduino IDE, for instance, compile to just around 2-5 kilobytes of binary output.
UNO has this capacity in its Flash, the Lilypad doesn't!About Arduino LilyPads: These are built around lower power but not lower memory specification versions of the same microcontrollers used in the Arduino Uno: The ATmega168V or the ATmega328 (#1). Hence, the available flash memory on the LilyPad is the same as on the corresponding Uno board.
Where did those numbers come from?The Arduino IDE's support for ~30 kilobytes of application binary stems from the support for the ATmega328 family of microcontrollers on both the boards mentioned. The ATmega328 has 32 kilobytes of Flash memory, of which the Arduino bootloader takes somewhere between half and a couple of kilobytes, depending on which variant is loaded.
The remaining 30-odd kilobytes (ATmega328) of Flash are thus available for user-created Arduino applications, their data, buffers et cetera.
Besides this, 1 - 2 kilobytes of SRAM and 0.5 - 1 kilobytes of EEPROM are also available on the ATmega168 and ATmega328 controllers respectively.
(#1) While the Arduino Lilypad official page mentions an ATmega328V microcontroller, the Atmel web site does not yield (for me, anyway) any such variant of the ATmega328, on a search. Hence, no datasheet found either.