Step 4: The Software
Here is the .pde sketch file.
Just download this sketch and load it into your AtMega328 chip and you are off and running!
The code has almost exhausted the RAM capacity of the ATMega328 - if you decide to make any changes, you will need to be very careful not to let the buffers corrupt the stack space.
All of the code is commented - and should be able to be followed.
An update from 4 years after the project was made:
Ahh - It looks like the original site that held the ethershield library has dissipated into the ether, and the arduino IDE has changed a lot. (I wish that they would not change the IDE that much to break the older code)..
There are two alternatives:
https://github.com/jcw/ethercard - it looks like it is supported for Arduino 1.0
https://github.com/thiseldo/EtherShield - it looks unsupported, but at least its there :-)
I can not comment right now on either of these libraries as I have not used them.