Update: README.xcompile.20180518 is in the same repository, but has been revised for the latest stable gcc (8.1.0), binutils (2.30), as well as some other refinements. The avrdude-6.3 patch remains alarmingly relevant. Hope this helps...
Update: I've retained a github repository with full instructions for building the cutting-edge AVR GNU toolchain (including avr-gcc 7.2.0 and avr-libc 2.0.0), as well as patching avrdude-6.3 to eliminate USB I/O errors.
The instructions are focused on OS X (using MacPorts), but should be easy to adapt for Unix / BSD hosts.
It also provides instructions for using dfu-programmer to flash the Olimex AVR-ISP-MK2 for libusb-based firmware, overwriting the factory default AVR Studio firmware.
Since then, I've had no issues. I cobbled together a minimal programmer board with a 40 PDIP ZIF socket that draws 5V power from the AVR-ISP-MK2 with 5V:ON jumper setting.
Simple veroboard implementation for quick and dirty programming...
Older Instructions:
I know this is a late answer - but the Olimex AVR-ISP-MKII needs a firmware upgrade for use with avrdude (as opposed to AVR studio - see documentation).
Since I'm on OSX, the Atmel Flip utility wasn't a convenient option. Instead, I grabbed dfu-programmer, and flashed the programmer with the firmware libUSB-AVRISP-MKII.hex available from Olimex:
- Connect the programmer, and press the upgrade pin - the LEDs should turn off.
dfu-programmer at90usb162 erase dfu-programmer at90usb162 flash libUSB-AVRISP-MKII.hex dfu-programmer at90usb162 start
At this point, the orange and red LEDs were on.
You may have to tweak the dfu-programmer source, if libusb-1.0 (required) lives somewhere besides /usr/include. I'm considered submitting an improved configure.ac and build system. (MacPorts users can install the dfu-programmer and dfu-utils packages.)
Plugging the ICSP10 into my cheap AVR-P40-8535 board, with an ATmega8535 in the socket (the MKII jumpers set to ON:5V) :
running: avrdude -c avrisp2 -p m8535 -P usb
returned the correct device signature "0x1e9308" for the ATmega8535.