$200 USD / hour - that's what I charge to write embedded software programs... Also, I don't do your home (or other) work for you unless you make some effort to do it yourself first. Then, I may help you figure out where you have run off of the tracks.
FYI, I have been writing embedded real-time system software for 30+ years, starting with Intel 8-bit 8048 systems in assembler.
rajii93: I think you missed a few salient points about rubberman's response. First off, he was not seriously proposing that you pay him to do the work (though AFAIK that is indeed his going rate for such projects). The offer was sarcastic; what he was really saying is, if this is an assignment you are doing, you need to do the work yourself rather than trying to get someone else to do it for you.
While we are indeed here to help, that does not equate to us doing your work for you for free. You need to show some effort in the project before we will be willing to assist you.
If you are really determined to hire out the project, try freelancer.com, otherwise, do your own damn work. If you come to a problem you can't solve, ask a question here in an intelligible manner, then we might be able to do something.
In any case, you haven't provided anywhere near the necessary information needed to proceed, so we would not be able to do the work even if we were willing to, simply because there are too many things we don't know about the hardware in question, and about the development tools being used.
USART and SPI generally do different things and both tend to be 3 wire connections (because they require a ground). 2 wire connections tend to be used on a single PCB and don't require a ground because it would be extrememly unusual for a single PCB to have more than 1 ground.
Your micro processor supports a two wire interface (which appears to be to be I2C in all but name) as a separate periferal device and all three of these perfierals are described on pages 120 - 185 of the datasheet for the atmega8 device.
They are not normally hard to use, you configure your peripheral device, TWI for example, you configure the microprocessors i/o ports to give the peripheral device access to some of the pins of the microprocessor and then generally you write and read data to/from the transmit and receive buffers of the peripheral device.
This is more or less the same for any microprocessor and is vertually always described in detail in the microprocessors datasheet.
Get the datasheet for your microprocessor and read it.