I am able to execute commands on my lcd when I use delay instead of 
checking the busy flag but when I check the busy flag,it appears as if 
an infinite loop has started.Here's the connections for my 4 bit Lcd 
with the AVR Atmega 16.Thanks a lot in advance :)
************************************************** 
***************************
PB0-> RS ; PB1->ENABLE ; PB2->R/W ; PB3->NOT CONNECTED
PB4-PB7----->DB4-DB7

************************************************** 
*************************** Code:
************************************************** 
***************************

#define data PORTB
#define e PB1
#define rs PB0
#define rw PB2

void lcd_ready() //checks for busy flag
{

DDRB&=0b00001111; //data lines as read
int flag=0;

cbi(PORTB,rs);
sbi(PORTB,rw);

do
{
pos_pulse();
_delay_us(10);
flag=PINB;
flag=(flag&0x80); //to store the value of busy flag
pos_pulse(); //discard lower nibble
_delay_us(10);
}while(flag);
DDRB=0xff; //resetting data lines as output
}

void pos_pulse()
{
cbi(PORTB,e); // eable=0
_delay_us(2);
sbi(PORTB,e) ; // eable=1
_delay_us(2);
}

void neg_pulse()
{
sbi(PORTB,e); // eable=1
_delay_us(2);
cbi(PORTB,e) ; // eable=0
_delay_us(2);
}

void command(int a) // to receive and send command to LCD
{

//higher nibble

lcd_ready();

data=(a&0xf0);
cbi(PORTB,rs);
cbi(PORTB,rw);
neg_pulse();

//Lower Nibble

lcd_ready();

data=((a<<4)&0xf0);
cbi(PORTB,rs);
cbi(PORTB,rw);
neg_pulse();
}



void value(int a) //To send Data to the Lcd
{

//higher nibble

lcd_ready();

data=(a&0xf0);
sbi(PORTB,rs);
cbi(PORTB,rw);
neg_pulse();

//Lower Nibble

lcd_ready();

data=((a<<4)&0xf0);
sbi(PORTB,rs);
cbi(PORTB,rw);
neg_pulse();


}