That flash is just the heartbeat indicator of the now current loaded running firmware.
Flashing is simple if you understand what is happening.
The only way to write to flash memory is either a program running on the microprocessor (AKA bootloader) or via the ICSP ports.
You plug in the USB, that is a USB to serial conversion FTDI. The 168 or 328P (hint, hint, hint, hint- could be your problem as wrong processor is selected) and you ONLY communicate over serial to the processor. You cannot write to flash (there is no physical connection, just a logical one through the processor when the bootloader runs.
Bootloader ONLY runs for a few seconds after reset. The USB to serial can reset with a command, but there is also a manual override button that will reset thus making the bootloader run for a few seconds. You have a VERY small window of time where the software will try to connect to the bootloader and attempt to flash. However, if you have the WRONG flash selected- i's the wrong processor "type" sent to AVRdude flashing and you'll get the error because the hardware doesn't match the command.
SO, #1 KNOW what processor you board has (read the label on the processor NOT the silkscreen on the board!!!!!). Most came with a 168, some came with a 328 and they REQUIRE different selection to flash.