Hi, Your code looks OK, and #include is used in a right way.
I would write code this way:
#include <avr/io.h>
int main(void)
{
DDRC |= 1 << DDC0; //Set only PC0 to output
PORTC |= 1 << PORTC0; //Set only PC0 HIGH
for(;;;){} //Unlimited loop
}
Now, I see one mistake in Your code and that is
PORTC = 0x00;, as this part of code would keep Your LED OFF all the time.
but its showing error with the included header <avr/io.h>
For AVRStudio4 You need to have WinAVR libraries installed separately. If You don't have them - compiler cannot find them. Go to Options and find out if library is linked (see attached image (it shows AVRStudio5, but it should similar (or maybe it isn't, I'm not sure
))).
My advice is to get AVRStudio5 which is briliant IDE and comes together with libraries.