I have never used 2s (2 cell) lipo batteries, so I can't advise you there. I know you're not supposed to make your own packs out of individual cells, since the lipos need "balancing" to keep them happy.
I just wanted to point out that you could use a single lipo cell to power a 3.3v Pro Mini, instead of a 5v Pro Mini https://www.sparkfun.com/products/11114. It only runs at 8mhz (instead of 16), so I can't say whether or not it'll work for your project, but it's an option. You could also also use the exact same setup you have, just with the 3.3v Pro Mini (which accepts 3.3-12v).
Okay, if you're set on 16mhz, you can still keep things very small by using a power booster with a single lipo cell. I have this one from Sparkfun, https://www.sparkfun.com/products/11231, which will boost the output of a lipo cell to 5v with an a available current of 600ma (which is well above your maximum current draw through an Arduino). Then you power the Arduino directly through the Vin pin, and bypass the regulator (since your power is already regulated).
Sonnyyu's comment didn't take into account the 5v Arduino (as you noticed) or the size of usability of the final design. Based on what I know from your limited description, this charger/booster combo will give you all the voltage and current you need in a very small size, with charger attached.
The booster and the pro-mini are essentially designed to work together, so you won't have any problems. The pro-mini has two voltage inputs, either RAW or Vcc. You want the Vcc since RAW would run it through the on-board regulator, which you don't need because your power is coming from an off-board regulator. Either way, you're running your power through a regulator and the rest of the board is only getting 5v.
Also, I said to use the Vin pin earlier, forgetting you were using the mini. Standard Arduinos use the label Vin, but Sparkfun's pro-mini is labeled Vcc for this type of input.
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amundsen: @sonnyyu: as indicated in my first message, my reason to go to 7.4V is that I do also want to provide power to a 5V Arduino Pro Mini (I know there are 3.3V models but I want the 16MHz version).
Use 3.7 v to 5 v dc-dc converter. It is very standard these day and it have good efficiency ( >95%) and cheap. Anyway all we care is W·h, use one or two cell doesn't matter for final number. Two cell might increase complication of battery management circuit ( balancing, individual cell protection...) .
Apple use 3.7 V battery to power Ipad, You can not power Arduino Pro Mini with 3.7v ?