That would definitely be ideal. unfortunately, I'm on a bit of a time constraint so I'll most likely be going with the external 5v regulator and perhaps upgrading later if heating or wasted power becomes an issue. Two PV panels will be bringing in a minimum of probably 10-20 Wh @ 12v in the winter to charge the battery. As long as the regulator+lights+arduino doesn't eat up that much in the four hours per day the lights are active, I should be okay.

I'm glad you mentioned that because I thought the Vin pin  (I'm using an uno) could accept up to 12v. Is that not the case?

The battery will be powering a few strings of LEDs. They'll consume no more than 2W at most. The arduino will be controlling the LEDs via PWM and a few NPNs since the lights require more current than the arduino can supply. The arduino itself will be using a very minimal ammount of power. Just enough to signal the transistors.

One of the reasons I liked the idea of using the external regulator is, as was mentioned, heat. The controller will be running 24/7 so I figured putting the 7805 through that punishment would be a better idea.

Is it a bad idea to run arduino continuously off a car battery? The battery is not in a car. I was thinking I would hook up a separate 5v reglator like in this tutorial (http://www.sparkfun.com/tutorials/57) before the controller to reduce strain on it. I also read that the car battery is a noisey source and that the circuit in the tutorial will reduce some of that.

Right. Didn't think of that. I had the feeling that there were resistors in there somewhere. I tested a few groups of three and the current running through them ranged from 10mA to 30mA. I'll be using PWM to control the brightness, so I suppose I'll reduce the pulse widths until everything appears stable.

I have a string of 70 LEDs that run off 120 VAC. I need to run them off a 12V battery. Originally, they were wired in two groups of 35 in series. What I planned on doing was wire groups of 3 in parallel since 120/35 ~3.5 V/LED. That way each group of three would have 12 V across them. Is my logic correct here? The reason I ask is because one group of three burned out after being lit for a few minutes. Some of the lights in the string were bad, so I don't know if that was just a coincidence or if I need to add a current limiting resistor in there.

Any thoughts?

Right, good call! Thanks so much for the advice and clarifying the PWM thing.

That's what I was hoping to hear! The lights I'll be using will draw around 150 mA (much closer to the max draw of 200mA for the 2N3904 I plan on using  http://www.fairchildsemi.com/ds/2N/2N3904.pdf) is that still acceptable?

I'm trying to control a bank of lights with an external 12V battery. My plan was to use PWM and an NPN in a basic setup such as this: http://yfrog.com/jmledschematicp. I've put this circuit together but I don't quite understand how transistors behave when one uses PWM at the base of the NPN. if I do this: analogWrite(NPNbase, 128), does the transistor act as if it has 2.5V applied to its base or as if it's being switched on and off rapidly? The reason I'm asking is because I'm concerned about exceeding the max power dissipation of the transistor. When I read the voltage accross the collector and emitter, I get a high voltage as if 2.5V is being applied, not 5V.