http://www.alessioviti.com/lcdprojects/basic_dc_dc.htm

The above link gives the basic circuit. A simple description of AC versus DC follows....

A/C is a voltage that slowly goes from full on, to off then full on again (but now in the opposite polarity). It 'alternates' between these 2 polarities. In north america, it happens 60 times a second.

The bridge reroutes the current so that the positive always swings onto the same pin, the negative always appears on the same pin. If you were to scope the 2 pins, you now have pulsating DC instead of AC. The pulsating is because although the bridge always routes the current to the proper pins, the bridge has nothing to reroute during that instant when the A/C swings from full + to full -. That zero voltage point is called the crossover point.

The capacitor C1 stores the charge during the 'full-on' phase so something is still left when the power is crossing the zero voltage phase. C1 should be large enough so that under no circumstance that the input voltage to the regulator drops below its requirements. With a 7805, you would want the voltage to stay above 7volts (to be safe). If you find that the voltage is not stable (has ripple), increase the value of C1 or simply throw another cap across the line.

C2 gives a cleaner noise-free bus. Not used to reduce ripple.

Consider DC to be really slow AC. If you circuit likes AC, it would probably like DC unless it feeds directly into a transformer.