1. The component that supplies power to a computer or other electrical device. Most personal computers can be plugged into standard electrical outlets. The power supply then pulls the required amount of electricity and converts the AC current to DC current. It also regulates the voltage to eliminate voltage or current spikes and surges common in most electrical systems. Not all power supplies, however, do an adequate voltage-regulation job, so a computer is always susceptible to large voltage fluctuations. Power supplies are rated in terms of the number of watts they generate. 2. The term given to an electrical generator, used where power is not available always or at all.
See this forum thread for more info: Core power supply theory of operation.
This post has an equation you can use to calculate power supply filter capacitor values: