That looks OK to me, but you should specify in the diagram what kind of "AA" cells you are using; normal alkaline cells will be 1.5 VDC per cell, while rechargeables (generally) will be 1.2 VDC per cell. Based on your diagram, I am assuming you are meaning the latter rather than the former, as driving a servo with 7.5 VDC (if using alkalines) may shorten its life (most servos are rated to run on 4.5 - 6.0 VDC).
Just to make sure I'm on the same page I modified the diagram to show what I think is a non-recommended configuration and then one which I think will work. I figure you really don't need two separate power sources as long as the one you're using has the current (power) to run the servos and the Arduino. So while the Arduino board's 5V out may not supply the current necessary you can still pull it from the single power source. Can you verify yay or nay on the attached sketch?
I know this stuff is pretty elementary but I've been concentrating on computers and not basic electronics for a long time and I'm just getting back into it. Thanks!http://dl.dropbox.com/u/2622595/Servo_control_2.pdf