Digital ICs like microcontrollers, memory, and shift registers need a stable voltage source to make sure they work as expected. Most circuits are designed with a voltage regulator to accomplish this stability. In theory voltage regulators will vary their output to stay at a set voltage, regardless of how much current the load is drawing. As a load draws a little bit more current, the supply voltage will begin to sag. Conversely when the load is reduced the voltage may rise a little bit. Regulators work to eliminate, well minimize, this change.
Full Tutorial: Voltage Regulator Basics
