Your code doesn't clear anything.
PORTB |= ~(1<<PORTB1); // set everything except PORTB1 pin
_delay_ms(100);
PORTB |= (1<<PORTB1); // set PORTB1 pin
PORTB |= ~(1<<PORTB1); // set everything except PORTB1 pin
_delay_ms(100);
PORTB |= (1<<PORTB1); // set PORTB1 pin
And recommended tutorial: Bit manipulation (AKA "Programming 101") from the AVRFreaks.net
BTW: next issue might be "the pulse is way too fast so it seems there is none"
Try this:
while(1) {
PINB = _BV(PINB1); // toggle pin
_delay_ms(50);
}