The caps are not needed if the picaxe is running low current devices. But say it turns on a led that draws 20mA. And also say the wires to the battery are very thin. The supply will dip briefly and the chip may reset. If the circuit was an audio circuit, like an amplifier, you would hear a click.
Usual practice would be a 0.1uF cap per 3-4 digital chips. These smooth out brief transients. Then you can add a single bigger cap to handle big current dips. For instance, if you were using the picaxe to drive a servo and there was a common supply you would need much bigger caps than if you were lighting a few leds.
So sometimes you don't need these components at all. What I find is that often these sorts of components are available in bulk at really good prices - eg I got a catalogue from a company called Rockby <A href='http://www.rockby.com.au/Rockby/Mailer/010907_1.htm' Target=_Blank>External Web Link</a> yesterday and they are selling 470uF 6V caps for 1c each if you buy 500. So I buy a whole lot and then just mindlessly put them in every circuit. I also have salvaged lots of these components off old computer boards, and I did used to ask myself, if these boards have a 0.1uF for every TTL chip and a 22uF tantalum for every 5 chips, there must be a good reason for that.
Edited by - Dr_Acula on 04/09/2007 05:01:49