There are several ICE clones available that use I believe the MEGA 8. I started to build one and then found a cheap on on Ebay.
While I have not purchased one yet, they tell me that the Dragon board can be used like an ICE to do programming and debugging. Digikey had these for $50.
Some of the ICE solutions from Atmel seemed to be priced way too high. With my clone ICE, I am able to program the parts and do JTAG debugging on the real parts at speed. What more is needed?