I just fried my nano!

Hi MarkT,
Thanks ever so much for enlightening me on the subject. I was aware about voltage spike from motors causing problems but didnt realise it also applied to tiny servos. I have also had a recollection that I may have manually moved the servo arm pretty quickly whilst it was connected to the nano. Could this have sent a spike?
I must have just assumed because most of the servo tutorials power the servos straight from the arduino 5v, I assumed that the nano could cope with the same setup. Is the nano regulator inferior because its smaller and would a duemilenove cope better?
I have desoldered the nano from the PCB again now to reveal a nice hole in the top of the regulator so I think is defo toast!
The project I am doing requires that I use battery power to control the whole thing. Is there anything that you could recommend to power the servos that doesn't take up much space (ideally about the size of a 9v battery).also do you know of a part suitable part number for the regulator? Sorry for all the questions, but your advice is very much appreciated!

Thanks in advance.