I want to make a program that will display pictures (eventually video with sound too) on a small lcd screen, I wan't to use an atmega 328 chip with an sd card to store the images. Any help that would point me in the right direction would be greatly appreciated.
It all depends on what interface the screen uses.
Generally text LCDs have serial interfaces http://dioioib.blogspot.com/2010/02/easy-lcd-screen-interface-on-atmega32.html or http://www.engineersgarage.com/embedded/avr-microcontroller-projects/interface-lcd-circuit/ with a few control codes for flashing/reversed characters.
I think video might be a bit optomistic with that chip - although I have done video test pattern generators by just bit-twiddling an output line.
ps. Haven't tried it but this SoftwareVGA looks interesting