I can't believe that you are responding to my idiotic posts instead of to the one that started all this. Actually the capacitor part was for real, I think Gomer knows as much about three terminal regulators as his namesake.
I think you should read a few datasheets for voltage regulators. It sounds like your implying that there are two terminal regulators!
A voltage regulator doesn't need a capacitor! I can show you thousands of schematics that support that statement!
Now since your reading comprehension is at the same level as your maturity I will explain it all to you!
The capacitor is needed between the VCC and GND pins of the Atmel chip, the voltage regulator supplies 5V to the Positive rails of the breadboard. With me so far? Now we connect pin 7 to the Positive rail and pin 8 to GND. If you ever looked at the datasheet you would see that pin 7 is VCC and pin 8 is GND!
Maybe you need it simpified even further!
Power goes from the battery through the regulator to the capacitor then to the chip!
I have no credentials and I'm fairly new to microcontrollers and dont claim to be a genius or goduino like you! Like I said I bought a kit that included all the needed parts along with detailed instructions, the kit is designed by two MIT graduates with degrees in electrical engineering and computer science.
The directions I provided are from that kit, I can't post the PDF or I would have!
They explain everything very clearly and teach you WHY you are doing things. I recommend one to anybody trying to build thier own microcontroller.
The name of the kit is "Nerdkits" look it up!