Here’s a quick note about getting an ATtiny26 to work on an STK500.
First, as per the directions here, the reset pin (PORTE/AUX) needs to be connected to PB7 for programming to work. The chip should be inserted into SCKT3700A1.
Second, (and this is the part I spent a few hours figuring out) is that you need to make sure your ISP frequency is low. The ATtiny starts out using its internal RC oscillator (at 1MHz), so if you use a high ISP frequency, it just WON’T WORK.
If you’re using avrdude instead of AVR Studio (say, if you’re on a Mac or Linux), use the -B option to set the bit clock lower:
$ avrdude -p attiny26 -c stk500v2 -P /dev/tty.usbserial -t -B 100
Now, it’s time to start hacking