You need to post the schematic.
I'm not familiar with the program you're using here, but if possible you want to fill the board with a ground plane to take heat away from the regulator. At worst you can do it manually by just adding a lot of extra, thick traces. Also, that regulator needs capacitors (typically electrolytic) on its power in and power out lines; if you don't include them your power will be fruity. You can always leave the spaces unpopulated if you find that you don't require them -- but can't add a capacitor if you find out you need them and don't have a space available!
Most regulators should have caps on input and output, refer to the datasheet for specific recommendations. On the ATmega, pin 7 (Vcc) should connect to pin 20 (AVcc).
The ATmega also needs at least one bypass cap (100nF) near one of the power pins, and another from AREF to ground.