IM using power from micro controller board to power certain chips but when i use the same power from the board to power an LCD it cannot supply enough and the micro controller shuts off. I then bought another 9 volt adapter and used a 7805 regulator to supply 5 volts to lcd. Problem is that the control signals to the lcd are provided by the microcontroller while the power and ground is provided from 7805 source. What happens is everything gets ****ed up. The 5 volts supplied by the micro controller to the lcd control pins are not really 5 volts relative to the 5 volts that is powering the lcd. I think this is because of 2 different power sources and 2 different grounds. How can i fix this very anoying problem?

 

Running a system off mutliple supplies is very common. In your case it sounds like you just need to tie the grounds of the two supplies together. This isn't always the case, but I think yours is straightforward.

 

I agree with Crust, I am doing exactly that just now - and you NEED to tie the Ground's just now my Pic is running of a 9v battery, and my display, and all signals come from my cars 12v battery via the ECU

 

It would help to explain your need for two different power supplies. Generally you would choose a large enough reg for all the loads, rather than bring in multiple regs.
Sometimes the quality of the Vdd rail isn't good for a combination of digital, analog, and power applications. There's an isolation strategy for every application though.
LCDs don't take much power at all unless you're using a backlight. It seems difficult to imagine that this is going to drag down your supply. Are you sure it's connected correctly?