I'm sorry for any English mistakes as I'm not used with using it when talking about technical stuff.
I have been using some ESP8266 WiFi modules with Arduino Mega for a project. They work with 3.3V Vcc but require some good amount of current (it can go over 200mA, as seen here http://wiki.iteadstudio.com/ESP8266_Serial_WIFI_Module), which make them impossible of powering from Arduino, and that's why I'm using batteries to power the VCC pin. I keep other two pins (CH_PD and RESET) at HIGH state, but I keep them at 3.3V pin from Arduino, as they seem to steal some precious current from ESP8266 VCC if connected together to the battery and make the ESP8266 unstable.
I used LM1117 because the original idea was to extract 3.3V from 5V Arduino pin for more current output, so an LM7833 would not work. Extracting 3.3V from the 5V didn't work as expected, so I'm using a battery now.
This circuit has been working fine with some ESP8266s, but some of them seem to be requiring more power, since they are failing to get WiFi connections most of the time, taking too many attempts to connect. Also, LM1117 eventually heats quite a bit and drains a lot from the battery. As you can see, I already power the ESP8266s from over 3.4V (although this level seems to drop a bit once I attach the ESP8266), and I'm kinda afraid to rise this level even more.
Do you have any ideas on a better circuit to provide 3.3V with good output of current for my ESP8266?