Installing an Arduino Bootloader
M-Short 
What is a Bootloader?
Atmel AVRs are great little ICs, but they can be a bit tricky to program. You need a special programmer and some fancy .hex files, and its not very beginner friendly. The Arduino has largely done away with these issues. They've put a .hex file on their AVR chips that allows you to program the board over the serial port, meaning all you need to program your Arduino is a USB cable.
The bootloader is basically a .hex file that runs when you turn on the board. It is very similar to the BIOS that runs on your PC. It does two things. First, it looks around to see if the computer is trying to program it. If it is, it grabs the program from the computer and uploads it into the ICs memory (in a specific location so as not to overwrite the bootloader). That is why when you try to upload code, the Arduino IDE resets the chip. This basically turns the IC off and back on again so the bootloader can start running again. If the computer isn't trying to upload code, it tells the chip to run the code that's already stored in memory. Once it locates and runs your program, the Arduino continuously loops through the program and does so as long as the board has power.
Why Install a Bootloader?
If you are building your own Arduino, or need to replace the IC, you will need to install the bootloader. You may also have a bad bootloader (although this is very rare) and need to reinstall the bootloader. There are also cases where you've put your board in a weird setting and reinstalling the bootloader and getting it back to factory settings is the easiest way to fix it. We've seen boards where people have turned off the serial port meaning that there is no way to upload code to the board, while there may be other ways to fix this, reinstalling the bootloader is probably the quickest and easiest. Like I said, having a bad bootloader is actually very very rare. If you have a new board that isn't accepting code, 99.9% of the time its not the bootloader. For the other 1% of the time it is, this guide will help you fix that problem.