First off, the chip comes from the manufacturer in a bootloader state. Apply the necessary hardware conditions to allow for normal program execution. Use the latest version of FLIP anything greater than 3.1, as they have switched drivers as noted in their HELP tab in the later FLIP versions. If all of this is true, make sure you have properly routed the D+, D-, and GND lines. Make sure you have a proper OS for FLIP. You do not necessarily have to use a USB connector at the MCU side, as I found that they are nowhere near robust. If the MCU is bus-powered make sure that the host supplies the +5V, otherwise, leave the host +5V unconnected. Albeit, I have never tried using this chip without a host supply of +5V and I have no knowledge as to whether the bootloader will run properly if self-powered, but I assume that if it is self-powered the host should recognize the MCU without having to reset the MCU into ISP mode (on initial start-up from manufacturer). You do not need special cabling provided by someone else. I just cut the end off a standard USB cable and used my own connector. There are limitations to USB that make the cable length a factor. Also, the very first time programming this chip with the BLBJ bit set in FLIP is the only case where you should use the ISP hardware conditions if you do not allow your own programming code to jump to the bootloader. Be very wary of using the code at Atmel's site for USB enumeration as none of it works properly and I had to use two sets of source code to get their enumeration working correctly as an HID. I am currently designing hardware that utilizes this chip in self-powered mode and not bus-powered. I will tell you if my assumption is correct. Also, I used a straight 48MHz pre-packaged oscillator as I do not trust a crystal with caps. I may also note that I was never able to get this chip into ISP mode properly when bus-powered. Hence, the reason why the BLBJ bit is so important.