The heart of the regulator is a power transistor that varies its resistance continuously to keep the voltage steady at the output. This type of circuit is called a "linear regulator", it's an analog circuit and these kinds of regulators often need a heat sink because the extra power (the difference between the input and output voltage,multiplied by the current) is released as heat.
The second kind of regulator you will find is called a "switching regulator" or "buck regulator". These are both digital types of regulators, they work by adjusting the width of high frequency pulses.. and like a digital amplifier, they are much more efficient than an analog regulator and run cooler. But they are also more electrically noisy.
Here's an article about how a buck regulator works.. you can see it's much more complicated.
But since you can buy both types of regulators as prebuilt modules, they're really equally easy to use. Digital regulators are if anything easier to use since they don't generate as much heat. Switching regulator boards are incredibly cheap on ebay, just around $2-$6USD depending on what you need.
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