For a breadboard Arduino, I just want to wire up the power conductors of a USB cable directly to the ATMEGA328P. Is that OK to do? The dropout voltage of a 7805 regulator is like 2V, and I don't have any other regulators on hand. Do I need to add any capacitors to smooth out the voltage from the typical 5V usb phone charger?
Generally no. But without looking at the output you can't tell for sure.
Assuming it is a USB power supply and not a true battery charger circuit, it should be outputting voltages within the USB spec.
Smoothing caps can't hurt.
Well, I can measure the usb phone charger to make sure it's below 5.5V, the max voltage for ATMEGA328P's. I'm just wondering if the voltage is stable enough to be used.
I'm also not sure what size capacitors and how exactly to add them to the circuit, so any assistance there would be appreciated.