You can cut a slot for the USB and anchor the Dragon AVR using the opposite tab
The ISP header is marked on the Dragon PCB
In order to use the AVR Dragon with the Arduino IDE, you need to edit the internal programmers.txt file to add an entry for the Dragon. On Mac OS and Arduino 1.0.1, the file is present at:
Quit all running instances of the Arduino IDE, open the file with your favorite text editor and add the following:
dragon.name=Atmel AVR Dragon in ISP mode
You should now be able to select the AVR Dragon in:
Tools > Programmer > AVR Dragon in ISP Mode
The easiest way to get serial communication with your design is to use an FTDI cable. I used the SoftwareSerial library from the Arduino IDE to implement the Tx and Rx pins onto arbitrary pins on the ATTiny. The pins are chosen in the following line of the code:
SoftwareSerial mySerial(rxPin, txPin);
In order to choose the pins correctly, refer to the image below. It provides a mapping of the physical pins to Arduino IDE pins.
e.g.: refer to pin 1 in your Arduino code if you want to target physical pin 12. Image courtesy of the very good High-Low Tech post on support for ATTinys in the Arduino IDE.