Do I need a Reset Switch?
The ATmega can work without a reset button.  Powering down the controller will reset it, as the O.P. expected.  In-circuit programmer will also reset the controller every time new firmware is loaded.

If it becomes apparent that a reset button would be a nice thing to have, it can be wired like this:


Source: Atmel application note AVR042 (AVR Hardware Design Considerations) p.6
There is also a simplified approach, although be sure to read the comments made by @vaxquis below.

Since the circuit is built on a breadboard, one can always take a wire and touch between RESET# and ground.  That will momentarily bring the RESET# to ground, which will reset the controller.