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I'm using an Airwave 663 module. It's a 5.8GHz FM video + stereo audio transmitter module. Here is the datasheet: http://www.airwave.com.tw/specification/RF%20modules/AWM663TX.pdf

It is apparent that the module requires a 470uF 16V capacitor on the BYPASS pin. Compared to the other components on my board, this is absolutely massive. But I can't find any specification anywhere about what this capacitor does and whether or not this capacitor can be made smaller.

If anyone here has dealt with similar modules, what was your expereience?

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Bypass capacitor is just another name for a decoupling or smoothing capacitor. This probably means that the board has a voltage regulator on board and decided to have you be the one to provide the capacitor for it instead of on its own board.

With a RF module that can output a good amount of power, I would expect for a cap this large to be a necessity.

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The module draws up to 720mA for the more powerful 500mW version, but about 400mA for the 100mW version. I don't think such a cap is necessary. I mean, you can get a 1 amp 7805 working with a 10µF capacitor. – Thomas O Nov 1 '10 at 17:04
I can get a 7805 to work with no capacitor, that doesn't mean it is good at having a stiff voltage rail. RF systems can be very susceptible to noise created by even the most minor dips in power. – Kellenjb Nov 1 '10 at 17:17
In general it will probably work with lower values but it will cause your SNR to be worse witch will decrease your range. – Kellenjb Nov 1 '10 at 17:19
I thought you needed smaller capacitors as the frequency increased? Big capacitors have little to no effect. – Thomas O Nov 1 '10 at 20:34
The small high frequency caps are usually on-board right next to the chips that need them. The large capacitor supplies bulk amounts of power. – Kellenjb Nov 2 '10 at 0:55
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