Can't program atmega32 interfaced with LM34
The second circuit that you are referencing is only necessary if you need the minus degrees F range of the sensor. For an application where you do not need negative temperature sensing, eliminate the two diodes and directly ground that pin. The single output of the LM34 can then directly go to the input of your ADC. The voltage will be 10 mV per degree F.

If you do require negative temperature sensing, you will need to either power the LM34 from a source with an independent ground or you will need to use an op amp or equivalent to offset the output voltage. If the former, use the second diagram and connect pin 3 to the independent ground of your uP supply.