This is the schematic so far. I don't have the money at this time to build a proto. but it's a pretty simple concept. You would load theJTAG ICE boootloader onto the mega16. Then open up AVRStudio and it say the firmware needs to be updated. THe bootloader tricks AVRStudio in thinking it is a genuine JTAG ICE and uploads the firmware. Now you have a Bluetooth JTAG ICE!!
Enjoy!! NOT Done Yet!