Also I was looking at this tutorial on sparkfun and instead of the 0.1 uF caps they use a 10 and a 100 electrolytic cap. Can someone explain why they would recommend such larger caps than GearMotion. Just curious.
The cap on the input side should be around 220nF (i.e. 0.2µF) and about 22µF on the output side. The purpose of those caps are not supply smoothing, that's what the large cap in front of them is for. Those two caps are to prevent noise and, even more important, to prevent oscillations.
They can be varied a lot without the circuit going haywire (under ideal circumstances) and that has unfortunately led to various specs from people that seems to base their desicions on either bigger-is-allways-better, or lets-keep-it-physically-small.
If you want to be absolutely perfectionist about it (read: make it as robust as possible,) you'd need lots of calculations based on current draw, impedances and frequencies of the mains as well as the major noise bands - plus lots of imperical measurements, but the 220nF in and 22µF out is a well balanced compromise and I have never seen a circuit misbehave when set up that way, as I have seen with other combinations, with larger and/or smaller caps.
If it's just to operate on your desktop in a controlled environment, you can get away with a lot, but adopting the philosophy to allways design for harsh conditions, won't make it stop working on the desktop and it won't cost you anything, so there's no reason not to go for it.