And, that drop means less range
The other thing you could do is wire it or a power jack directly into a PF cable, that way you only have to get it right the first time. If your not using the V-reg, it'd be best to put the .1 uF cap as close as possible to the camera, the closer the better. The 33-100 uF cap would go as close to the camera as possible as well, but with preference given to the .1 uF on closeness.
If your using the V-reg though, the 33 uF would go on the power input of the V-reg and the .1 uF as close as possible (again) to the camera. AFAIK this is so that the small spikes and dips are filtered out right next to the camera and if there is a voltage drop in the power provided to the V-reg, the 33 uF will power it through those "rough times". Remember, I'm in no way an expert, somebody with more knowledge will most likely prove me wrong
Yes, the V-reg will reduce power spikes and fluctuations on the power line, if not completely eliminate them. That's what the caps are there for, to help smooth things out even more. The V-reg will provide enough mA, provided you provide it with at least 3 V. It isn't exactly a power efficient regulator, consuming about 240 mA while providing 150 mA for the camera while powering the V-reg with aprox. 8 V.
In comparison, the PF train motor uses around 150-300 mA, depending on the weight/# of cars pulled*
. I hope this answers your questions, if you have more don't hesitate to ask them!