Hi Ali,
Sorry to know it brought you so much troubble.
To use the rainbowduino, you need to know that it has one atmega168 itself, so you can programm to it through Arduino IDE(e.g. 0018). However, without FTDI chip on it which change serial to usb, rainbwoduino could not be programmed directly. You need one uartSB or with the help of your Deumilanove board. Here is the link on how to programm rainbowduino through arduino:
http://www.rngtng.com/2009/06/25/rainbowduino-here-it-is-and-how-to-program-it/
Anyway, glad to know that you have successfully programed the rainbowduino. So you may need to do by the steps I’v posted on the previous page.
May it helpful to you, and feel free to ask any question!
Regards,
-Icing