Safely powering 12 servos at once?

This is more of a general electronics question, but since i'm using a duelimanove, i'd ask here.

I have a hobby project involving 12 servos. In this project, I ran into a hitch. I don't have much experience with servos, and someone informed me that you have to run the signal and power wires from the same circuit, which sort of hinders itself due to the arduino only being able to handle, at most, 2 servos safely on it's provided outputs. So i thought if i just put the servos directly hooked to a power source and use the arduino on as a signal controller, i would be fine- but i'm curious, would it work if i just hooked the servos to the battery, and had a voltage regulator going into the arduino to power it off of the same source? Or is there some other way to just use the arduino as a signal controller and power the servos separably?

would it work if i just hooked the servos to the battery, and had a voltage regulator going into the arduino to power it off of the same source?

Yes, it would. Presuming that the servo power source is of sufficient voltage to be able to drive the regulator to output 5V for the Arduino. And that all the grounds are connected.

Or is there some other way to just use the arduino as a signal controller and power the servos separably?

Two different power supplies (batteries), with the grounds connected.