I am in the process of running the atmega328 from my duemillanove as a standalone and for power I am using a 12v source, so I got myself a 7805 voltage regulator. My question is, can I connect the 5v output from the regulator to the power pin on the atmega, or its there some "softening" to do before? i.e using capacitors.
I use the documented capacitors for the voltage regulator, and the decoupling capacitors James mentions. Apart from that, you can connect to the output to the Vcc pin of the Atmega.
Many regulators require some input & output capacitance to avoid oscillation. Some don't:
"Considerable effort was expanded to make the LM78XX series of regulators easy to use and minimize the
number of external components. It is not necessary to bypass the output, although this does improve transient
response. Input bypassing is needed only if the regulator is located far from the filter capacitor of the power
supply."
Putting a 1uF on the input and 0.33uF on the output certainly won't hurt anything. I usually put a 10uF and 1uF on if I have them handy, or values in that ballpark, and then 0.1uF on the Vcc pin of every part.
Will be useful as a clock if using a crystal as shown, or a Duemilanove [which "apparently"
also uses a crystal], but not when using a ceramic resonator or a UNO board, which appears
to use a resonator and not a crystal. Crystal = 20-50 PPM tolerance, resonator = 0.5%
tolerance.