Andy,

The LDO or drop out voltage is not really the differential voltage across the reguator, The dropout voltage is a particular level or value of the differential voltage across the regulator below which the regulator will cease to function properly (usualy meaning that the output shuts off).

There are convincing reasons to use LDO regulators in applications where the input voltage is significantly higher than the lever that just prevents dropout. Some of those reasons are:

1) LDO regulators work with lower internal bias levels and so the parts typically have lower supply current draw to power the regulator chip. This can be very useful in battery systems where the processor puts itself to sleep and the regular load on the reguator drops to near zero.

2) LDOs come in cool small surface mount packages that are way more convenient than the old standard 7805 in To-220.

3) Many LDO'S, being newer parts, have more modern designs and thus may be more rugged and/or immune to mistreatment than the older chips.

Michael Karas