Downloading the archive
Get the latest version from the avr-libc website. You should get version 1.6.6 or higher.
Configuring and compiling avr-libc
Run the following command:
tar xjf ~/Desktop/avr-libc-1.6.6.tar.bz2 cd avr-libc-1.6.6
Make sure that the latest avr-gcc is on your path as the default
./configure --host=avr --prefix=/usr/local make sudo make install
You should now have an avr-libc installed that includes support for the mega328, so you will be able to compile programs for this microcontroller. To program a chip, you will probably want AVRDUDE. Section 5 contains instructions for compiling installing and installing the latest version.