Quote Originally Posted by Bruce View Post
These are sometimes called "bypass" or "decoupling caps". They act as a
local voltage source during high frequency noise spikes. Without them, the
PIC can reset, lock up, or just act plain crazy. You might even think there's
a problem with your firmware when all you did was forget that silly cap.

Think of them as tiny little fast-acting batteries that keep the PIC Vcc and
ground pins stable during fast noise spikes.

They charge up to your power supply voltage, then quickly discharge during
brief switching current spikes to maintain voltage levels.

It's a good idea to add bypass or decoupling caps near all IC's in your circuit.
I normally include one at every Vcc/gnd connection point.
Everything Bruce said here is spot on target, I would add, they act as very fast-acting short circuits to noise spikes in the upward direction too. . .smooth out the highs and the lows . . Great little gadgets . . .