Also a comment that might be usefull for others...
If you want just to unlock the chip to it's best of capabilities just check SUT0 to your programmer (not quite sure but that's what I've done)
Check the section "Clock Sources" for your part's data sheet (ie ATmega8).
This section defines the possible values of SUT0 and SUT1. The settings of SUT0 .. SUT1 must match the characteristic of the oscillator that you are using for a specific speed, specially if you are using an external oscillator. If you are using the internal oscillator you are free to play with the values, of course do so always with caution.
Also this only affects start-up times and doesn't "speed-up" the actual processing of your MCU. There is no actual advantage in setting this.
When changing fuse bits in ponyprog the first writing verification would fail... Uncheck the fuse bit back to the options and run again the downloading process, it should verify it and you are ready to go!!!
Before programming the fuse bits make sure that you have setup the correct part! A failure in verifying/writing the fuse bits is a sign that either your programming speed is too high or you have an incorrect part setting. I have once tried to program the fuse bit of an ATmega168 when my programmer settings were for an ATmega169! This is a very simple way to destroy your MCU.
It's a common fact that if you don't break you don't learn...
Yep but I attribute this kind of learning to blindly doing something without reading/researching first. Or going over your current capabilities. Comprehend/understand something before acting. It'll lead to lesser frustrations, headaches and broken things. Cheers!