I've got a JtagIce mkII knockoff from eBay @ ~$100. It works (r/w flash, eeprom, all fuses) perfectly from within Atmel Studio 6.1. Interestingly enough, a JtagIce mkII (original version) can be bought @ $399 (!!!) directly from Atmel, while JtagIce3 - for $99. I don't understand why this huge price gap.
As for the 'avrdude' for windows missing libusb, try to put the attached dll in you 'avrdude' executable folder.
[ either leave it at "libusb0.dll", or rename it to "libusb.dll" ]
AVR family is just fine (and still, I'am not necessarily an AVR fanboy), it is just that there are many AVR knockoff products/dev-boards (Arduino like) out there with lack of support.