We are now working on a project that requires external crystal. I borrowed a microcontroller from my friend today. We were using external crystal for our project, and I thought that was no big deal. I brought the microcontroller home, and tried to program it. Ponyprog said it is an unknown device. I was quite anguished and thought that it the microcontroller was fried. Suddenly just for curisity, I plugged in a 12MHz crystal. And wow, ponyprog started working again!

Moral (!!!!) : When you have programmed fusebits for external crystals, you MUST use one (crystal) to program the microcontroller.