Smoothing Capacitors

I don't know much about when they are needed or how you calculate their values, but it might help others to know what type of circuit you are creating to help them answer your questions.

The capacitors are used to short circuit any noise generated by your circuit to ground. High speed digital circuits can generate a lot of noise on the power lines as they switch and that noise can generate RF signals that radiate from your supply wires and cause interference both in parts of your own circuit as well as in things around it (like your car radio, cell phones, etc). How many you need and where you need them is a complex issue of of how much noise your device generates, and how much you care about what RF noise it generates. Some designs will put small capacitors next to almost every digital IC on a circuit board design to help reduce radiation of noise though the power lines.

Most regulator circuits need them on the regulated output but you can normally find answers to what is needed with the specs or application notes of the regulator. On thing to keep in mind is that they normally need two capacitors in parallel, a large one, and a small one. In theory, the small one wouldn't be needed, but large electrolytic capacitors don't actually work well at high frequencies so you need to small capacitor to deal with the high frequencies that the large one can't handle.

I'm fairly sure that you can't put too much capacitors on the power lines. It's mostly just an issue of making sure you have enough in the right places to keep the noise levels down to whatever level is required.