So it does feed to the 5Vregulator then . It is not feed 9V to the chip?
It can be used two ways. If there is an extenal voltage source plugged into the external power connector, then the Vin pin can output that same external voltage (minus one diode voltage drop) and be used to power things that require the higher voltage avalible from an external power source, there is a 1 amp limit based on the series voltage polarity protection diode.
If there is nothing plugged into the external power connector then the Vin pin can be used to input a voltage that only goes to the input of the on board +5vdc voltage regulator.
Lefty