I tend to use higher voltage transformers, in the 8-12VAC range, full-wave 
rectifiers + filter-cap, then use switching-regulators that are 
pin-compatible replacements for the popular LDO regulators. They are 90%+ 
efficient, and therefore generate almost no measurable heat. 

If the current is really low, say 50mA or less, I'll use an LDO.

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