I have gone through this thread and was surprized by reading the posts of some forum members. May be I am wrong, but let's make the things and conecpts more clear.

Andy Neil wrote:

The "LD" in "LDO" stands for "Low-Dropout" - ie, there's only a small input-output voltage differential across the device. Hence only a small power dissipation.
No surprise

Rob Klein wrote:

The 'voltage' term in this case is the difference between the input- and output voltage of the regulator. A low-drop regulator allows for a smaller difference, hence lower power at the same current.

Andy Neil Wrote

You missed my point; viz, that the voltage is low in a LDO - thus power dissipation is low.

If I have understood these sentenses correctly, they want to say that LDO type regulators, being having low drop out, will dissipate less power than normal linear regulators.

In fact, an LDO will dissipate the same amount of power on a given voltage difference and load current as that of a normal type requlator.

Mehmood Wrote:

I used MICREL MIC2940A LDO, to my surprise I can draw up to 1.5 Amp with no heating what so ever. Infact it was a surface mount package, I read the datasheet and they say it is linear regulator, I wonder how they dissipate the excess power?

I wonder why you overload the regulator, which manufacturer has built for 1.25A current.

I dropped 12v down to 3.3 v at 1.5 amps average and no heat sink

Well, for how many milli seconds?
It is impossible for a linear regulator to dissipate almost 13 watts continuously without heating up.