I've pushed a few updated for ArduinoISP. I'm using the AVR toolkit from Arduino 1.0 to test it. Good news is that you don't need to worry about auto-reset on the Arduino UNO. If you connect with the toolkit avrdude the board doesn't get reset. (If you connect using the serial console it does reset, so they must have made a change in avrdude.)
Arduino 1.0 includes a recent ArduinoISP sketch, with the 'write to larger eeprom' fix.
ArduinoISP will continue to focus primarily on burning bootloaders. More advanced users should submit requests to the mega-isp project on Google Code: http://code.google.com/p/mega-isp. The source code is available from http://github.com/rsbohn/arduinoisp.