Electronic – How to run ATmega328P-PU using 3.7v Lipo 600mAh

I would simply find a voltage regulator or even better, a current regulator that has a low drop-out voltage. In that way, you don't need the sparkfun board and you can control your LED without having to boost it and then regulate it back down. That seems like a lot of effort and wasted energy going through two stages instead of one since your battery can handle the voltage requirements of the LED.

It's much better to use switching regulators than LDOs, especially with a in-out voltage difference that you will have, because of the heat dissipation.

However one of the problems with using switching regulators for the hobbyist is that almost all of them come in surface mount packages -- of the 20,592 switching regulators currently listed on Digi-Key, just 128 come in DIP packages.

If you can get by with a maximum current draw of 1.5A on either the 5v or 3.3v rails, then I recommend the MC34063, which comes in an 8-pin DIP and costs just 62 cents from Digi-Key. (Or use a switcher for the 5.0v rail, and a LDO for the 3.3v.)

One of the drawbacks of using switching regulators is that you do have to surround it with a number of components, some of which set the voltage and current for adjustable regulators like this one. But all of these components can be easily found as through-hole parts. Here is a configuration for a 25v to 5v 1/2A step-down converter. You'll want to get an inductor with twice the current rating as your output.

If you have surface mount capabilities, then I suggest using a dual regulator like the TPS54295 in your case. It has a capacity of 2A for each rail, and comes in a fairly friendly 16-TSSOP package. It is available from Digi-Key for $2.58. The extra components needed are similar to the schematic shown above, times 2.